Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — PUBLIC BUILDING AND WORKS

Crown Office, Bishop Auckland (Tenders)

Mr. Boyden: asked the Minister of Public Bulding and Works why the largest building firm in Bishop Auckland, whose main works is less than one mile from the site of the new Crown Office and which employs mainly local men, was not invited to tender for the construction of the new Bishop Auckland Crown Office.

The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Charles Loughlin): The required completion date could be met only by an industrialised system, which local firms could not offer. The national contractor appointed will however employ local labour and local sub-contractors.

Mr. Boyden: Would not it have been better from the point of view of regional employment to go for a conventional brick building perhaps taking slightly longer to build? I assure my hon. Friend that local builders build quickly and very competitively. Can he give some home that at least as much as possible of the sub-contracting work will go to local builders?

Mr. Loughlin: My hon. Friend was one of the hon. Members who pushed us to have the completion advanced, to have the job done as quickly as possible. Of the three large nominated sub-contractors, one for the electrical work and one for the lifts have already been placed with Northern firms. There is another on the

ventilation and heating which I think may well go to a northern firm. With only one exception, the other 12 sub-contractors are northern firms.

Ancient Monuments

Mr. Scott-Hopkins: asked the Minister of Public Building and Works what is the cost to public funds of maintaining buildings of historic interest open to the public; and what revenue he receives for this purpose from the public entry fees and private donations, respectively.

The Minister of Public Building and Works (Mr. John Silkin): I estimate the current annual maintenance cost of monuments in my Ministry's care at £4 million approximately. The revenue is £¾ million, and less than £10,000 is donated from private sources.

Mr. Scott-Hopkins: I appreciate that answer, and thank the right hon. Gentleman for it. It is necessary to keep these buildings open. Will he do the best he can to increase the revenue from the public, who benefit enormously from seeing these historic buildings?

Mr. Silkin: I think that the whole House agrees that the care of the ancient monuments is of first-rate concern. It is equally true that our guardianship is extending the whole time. I must keep a proper balance between the revenue needed to look after the building and the prices the public can pay to go in.

Mr. Peter M. Jackson: Whilst I welcome my right hon. Friend's reply, may I suggest that he should consider the big increases private owners have thought it proper to charge for public admission? I suggest that he continues to review this matter. Visits to Ministry sites are very good buys. Even if there were a 50 or 60 per cent. increase, they would continue to be extremely good buys in comparison with the private sector. Perhaps if there were an increase in the revenue more might be done in the way of maintenance.

Mr. Silkin: I have said that this is really a matter of balance. I keep prices of admission constantly under review. My hon. Friend may be aware that there have recently been some changes upwards in, for example, the price of admission to the Tower of London.

Mr. Speed: Can the right hon. Gentleman say how the sales of season tickets to his Ministry's buildings are going this Christmas?

Mr. Silkin: I cannot say what the position is at this moment, but the sale of season tickets generally is very satisfactory.

Construction Industry (Output)

Mr. Silvester: asked the Minister of Public Building and Works if he will make a statement on the current value of orders for new construction as published by his Department.

Mr. Allason: asked the Minister of Public Building and Works what estimate he has made of output in the construction industry for 1969.

Mr. John Silkin: Figures for the third quarter of 1969 indicate that orders for new work this year continued to fall. As I said in reply to the hon. Members for Twickenham (Mr. Gresham Cooke) and the Isle of Wight (Mr. Woodnutt) on 12th November, I expect the decline in output in 1969 to be about 3 per cent. from the 1968 level.—[Vol. 791, c. 388.]

Mr. Silvester: Is it not the case, however, that some of the figures for the first nine months of this year show declines of up to 20 per cent. in public sector spending on construction compared with the first nine months of last year? Is not that a rather more serious picture?

Mr. Silkin: Any decline in output is bound to be somewhat serious, but there was an exceptionally bad winter, and, therefore, the first nine months of this year may have been somewhat overbalanced by that. I hope that the final figure at the end of the year will not be quite so bad.

Mr. Allason: Is the Minister aware that the industry has described this as the worst setback in 20 years? What does he propose to do about it? Cannot he give any hope for the industry? Is he aware of the evidence to the Bolton Committee that there is too much do-it-yourself going on now, with consequent damage to the fabric of buildings?

Mr. Silkin: There is a large number of questions to be answered all in one here. It does not behove any Minister in

these circumstances to be self-satisfied about the situation. I agree that it is difficult. I am somewhat consoled, however, by the knowledge that, taking the last 10 years at constant prices, the average annual output was £3,300 million in the construction industry. Taking the appropriate years of Conservative Government. it averaged £3,200 million, but under a Labour Government it has averaged £3,650 million.

Mr. Fernyhough: Would my right hon. Friend not agree that if there is slack in this industry which needs to be taken up the Conservative councils which have considerably reduced their housing programmes despite the need in their respective areas might do more to build the houses people need?

Mr. Silkin: I certainly think that more might be done in housing. I know that my right hon. Friend has made considerable efforts to improve the conditions for house-building generally in the private sector as well as encouraging the public sector to build more houses.

Mr. Speed: Would the Minister not agree that, apart from the exceptional winter of 1963, this is the first decline since 1951?

Mr. Silkin: It depends on what sort of a decline we are talking about. We are talking here about a decline from a very high level indeed to a level not so high. It is still much higher than it was in the years when the friends of the hon. Gentleman were in control.

Mr. Mawby: asked the Minister of Public Building and Works if he will list in the OFFICIAL REPORT the value of output in the construction industry for each of the past 10 years.

Mr. John Silkin: Statistics of the value of construction output at current and at constant prices appear in the Annual Bulletin of Construction Statistics, which is available in the Library.

Mr. Mawby: I thank the right hon. Gentleman for telling me where the information can be obtained. Is he aware that it is evident that the value of output will be down this year and that the actions of the Government are mainly, but not completely, responsible for it? What will he do about it?

Mr. Silkin: I cannot help suspecting that the hon. Gentleman is trying to get a second bite at a cherry we had earlier. To take the first of the ten year figures, in 1959 the value of output in the construction industry, at current prices it is true, was £2,399 million; last year it was £4,567 million.

Flags (Houses of Parliament)

Mr. Gwynfor Evans: asked the Minister of Public Building and Works what is his policy in regard to the flying of flags above or in the precincts of the Houses of Parliament.

Mr. Loughlin: The flying of flags above the Houses of Parliament is a matter for the authorities of the two Houses

Mr. Evans: Is the hon. Gentleman aware that these symbols have a significance which cannot be disregarded and that it is incongruous that the Welsh national banner should not be flying about the Houses of the only Parliament that Wales has? Would he try to ensure that the Red Dragon of Wales will fly alongside the Union Jack above the Palace of Westminster at least until the time when Wales has her own Parliament, where she can fly her flag?

Mr. Loughlin: As long as the hon. Gentleman will accept that my right hon. Friend is not the arbiter in this matter, I do not see why I should not write to the authorities of the House drawing attention to the desirability of the Red Dragon flying on St. David's Days.

Mrs. Ewing: While the Minister is sending his letter will he bear in mind that there would have to be room for the Sal, ire alongside the others?

Mr. Loughlin: I anticipated that if I gave an affirmative answer for Wales some of my Scotch friends—

Mr. Rankin: Scots. Scotch is whisky.

Mr. Loughlin: This is in keeping with the proximity to Christmas. I anticipated that some of my Scots colleagues would want the same done. I will certainly do the same so far as Scottish days apply.

Mr. Heffer: When the Minister is writing his letter would he point out that the Union Jack is a national flag and not the flag of the Conservative Party?

Mr. Loughlin: I would rather not get further embroiled in flags because I might find one for the Forest of Dean.

Light-weight Aggregate

Mrs. Renée Short: asked the Minister of Public Building and Works what steps he has taken, and what further steps he proposes to take, to assist the high-grade, light-weight aggregate-producing industry.

Mr. Loughlin: The Department continues to encourage more extensive use of light-weight aggregate by using it widely, by supporting research and by publishing information and technical guidance.

Mrs. Short: Is my hon. Friend aware that this industry is operating at a fraction of its capacity and is facing a very difficult situation? Would he bear in mind that his right hon. Friend's predecessor gave certain undertakings to the industry? Would he look at these again and see what can be done, in the considerable capital development programme of his own Department, to encourage those who have invested considerable amounts of capital in the industry?

Mr. Loughlin: I will certainly look at the undertakings that are alleged to have been given. My Department uses lightweight aggregates as far as possible. Apart from that, it must be admitted that the designer must be left to choose his own materials. All that we can do is to draw his attention to the choice that exists.

Sir Harmar Nicholls: Would the Minister bear in mind that the points of view put forward by the hon. Lady are very much more in keeping with the apprehensions of the industry than those put forward by the Minister? Is he aware that the aggregate industry and the whole of the construction industry are concerned at the decline, which is the first since 1963, and which the Government Front Bench do not seem to be treating with the urgency it demands?

Mr. Loughlin: I must repeat what my right hon. Friend has said. It may be a decline, but, like all declines, it depends where we start from. It is no good hon. Gentlemen opposite criticising us on this issue because they have not got a leg to stand on.

Labour-only Sub-contracting

Mr. Costain: asked the Minister of Public Building and Works when he expects to introduce legislation to implement the Phelps-Brown Committee Report on Labour-only Sub-contracting.

Mr. Mawby: asked the Minister of Public Building and Works when he now proposes to introduce legislation for the purpose of regulating labour-only subcontracting in the building industry.

Mr. John Silkin: I have nothing to add to my answer to the hon. Member for Twickenham (Mr. Gresham Cooke) on 12th November.—[Vol. 791, c. 388.]

Mr. Costain: Does the right hon. Gentleman not appreciate that a delay in introducing this legislation, forecast in the Gracious Speech, is lending credence to the rumour in the industry that the Government do not intend to introduce such legislation or will at best introduce a minor sop to correct some rulings in the courts?

Mr. Silkin: I am always very happy on the rare occasions when I can agree 100 per cent. with the hon. Gentleman, and we can go forward together in disagreeing entirely with that rumour, which I had not heard. It is the Government's intention to legislate, and I only hope that when the plans are announced the hon. Gentleman will be as happy with the proposals as I am sure my hon. Friends will be.

Mr. Mawby: Is the right hon. Gentleman aware that this subject receives widespread support throughout the House? As the Bill will probably have to be rather technical to deal with all the problems, would he agree that we ought to have as much time as possible? Could we have the Bill at the earliest possible moment?

Mr. Silkin: I would have thought that to have the Bill at the earliest possible moment was self-evident. When it is ready, that will be the earliest possible moment.

Whitehall Redevelopment

Mr. Allason: asked the Minister of Public Building and Works if he will preserve the facade of Richmond Terrace

by incorporating it in the design of the new Government buildings on that site.

Mr. John Silkin: I am aware of the hon. Member's views on this difficult subject, which together with all other views will be considered at the appropriate moment.

Mr. Allason: As this method has been used so successfully in Regents Park, would the Minister consider using conservation methods in the most historic conservation area in Britain? Why must we substitute something that looks like Noel Coward's birthday cake?

Mr. Silkin: I am reminded more and more how, whenever any piece of architecture is designed, it is bound to create a considerable variation of opinion. It is one of the sad things of life. I do not agree with the hon. Gentleman in his birthday cake allusion. Many people like the building; I have no doubt a number of people will not like it. I have promised to consider all these matters together, and I will.

Mr. Snow: Is my right hon. Friend aware that the party opposite has a pretty rotten record of Philistinism in this respect? Is he aware that I have a list of buildings which have suffered under them and that I would be happy to send it to him?

Mr. Silkin: I am grateful but I am much more concerned with the present position on the Whitehall redevelopment.

Mr. Chichester-Clark: While ignoring the self-righteous interventions from his own side of the House, would the Minister agree that there is now a mounting case for an inquiry into this and other aspects of the whole Whitehall plan?

Mr. Silkin: As the hon. Gentleman is aware I never closed my eyes to the possibility of a public inquiry. All I have said is that I want to see what happens as a result of the present display now being held, if I may put in a commercial, in the Crypt of the Banqueting House, Whitehall.

Kenilworth Castle

Mr. Dudley Smith: asked the Minister of Public Building and Works if he will make a statement about the official visit he paid to Kenilworth


Castle; and if he now proposes to make changes in his Department's supervision of this historic site.

Mr. John Silkin: I welcomed the opportunity to meet representatives of the owner, the Kenilworth Urban District Council, with which my Department enjoys excellent relations. In particular, I noted that the standard of upkeep and the facilities we provide are much appreciated by visitors. I do not, therefore, propose to change these arrangements. They will, however, be reviewed regularly.

Mr. Dudley Smith: Is the right hon. Gentleman aware that the residents of the Kenilworth area are very pleased that he and his Department are taking such an interest in this most valuable and historic site? Could he say what effect on attendance the efforts of his Department have had over the various years in which it has taken an interest?

Mr. Silkin: I am very grateful for the first part of the hon. Gentleman's supplementary question. I am glad to say that the number of visitors has increased substantially, from about 61,000 in 1956 to over 114,000 in the first ten months of this year.

Defence Building Works (Structural Deficiencies)

Mr. Onslow: asked the Minister of Public Building and Works how many of the building works undertaken by his Department for the Ministry of Defence within the past five years have been found to be structurally deficient during or after construction.

Mr. John Silkin: Eighteen, Sir.

Mr. Onslow: Is not that rather too many? Will the Minister make available to the House a list of barracks, married quarters, officers' and sergeants' messes, and instructional blocks in which design faults have caused costs to exceed original estimates by more than 20 per cent.?

Mr. Silkin: Eighteen is too many. One is too many. But these things occur. In general, I am very proud of our record, and I do not believe that it is in any way out of the way. Apart from the cost of remedying Ronan Point-type buildings, the actual estimated cost to the public of remedial works has been £120,000.

Mr. Ashton: Can my right hon. Friend tell us how many major new works have been carried out for the Services during the past five years and at what approximate cost?

Mr. Silkin: My hon. Friend has made a very valid point. During these years there have been 2,000 major new projects for the Ministry of Defence, and the approximate cost has been £330 million.

Building Costs

Mr. Dempsey: asked the Minister of Public Building and Works if he will give an estimate of the percentage increase in building costs over the next two or three years in the light of increased labour and material prices.

Mr. John Silkin: No, Sir. It is too early to say.

Mr. Dempsey: But is my right hon. Friend aware that building interests claim that these elements will increase building costs by nearly 26 per cent. in the next two years? If this is so, ought not something to be done to convince local authorities that they should act much more expeditiously in considering planning applications for new building before funds are eroded?

Mr. Silkin: I do not think that I could accept my hon. Friend's figure on costs, though he is quite right to be concerned about them. I know that the industry generally has a very good record of absorbing rising costs. As to the second part of my hon. Friend's supplementary, I think that probably it would more appropriately be addressed to my right hon. Friend the Minister of Housing and Local Government.

Sir A. V. Harvey: Is the right hon. Gentleman aware that the increase in building costs of factories and plants this year in many places is something like 12 per cent? How does he expect industry to play its part in our economy when it is faced with increases of this sort—and more to come?

Mr. Silkin: Rising costs in the construction industry are always of concern to industry, and, indeed, to my Department, but we are very well aware of the very fine efforts which the building industry generally has made to try to keep its costs down.

Northern Lreland

Mr. Heffer: asked the Minister of Public Building and Works if he will state the estimated cost of work done by his Department in providing accommodation and services for Her Majesty's Armed Forces arising out of the recent emergency in Northern Ireland; and what representations he has received expressing dissatisfaction with the provisions made.

Mr. Loughlin: £162,000: I think it is generally appreciated that the Department has done a good job in difficult circumstances, and my right hon. Friend has received no representations of dissatisfaction.

Mr. Helfer: Is my hon. Friend aware of the fact that his Department has received a great deal of praise for the work it has done, especially from the rank and file of Servicemen, and not only from them but, in fact, from all those concerned with the emergency?

Mr. Loughlin: I am very grateful to my hon. Friend for making that statement in this House. I was in Ireland recently and discussed with most of the Service chiefs, including General Freeland, the job of work which was done by my Department. I did not have to ask them; they volunteered praise for the whole of my Department. I had very great pleasure in meeting my right hon. Friend's staff and expressing that appreciation to them.

Captain Orr: Would the Minister be good enough to circulate in the OFFICIAL REPORT a list of the actual undertakings, and could he say how much of the work was done by private contract?

Mr. Loughlin: A considerable amount would have been done by private contract. Here we were dealing with an emergency, and all routine procedures had to go out of the window, and my technical officers, along with representatives of the Forces, had to get to work on buildings of all kinds—dilapidated buildings, old mills—and get contractors in straightaway. What proportion of the work was done by private contract I am not at the moment in a position to say. I doubt whether there would be any great advantage in listing in the OFFICIAL REPORT all the buildings we had to take over. I

would do it, but I cannot see the advantage of doing it.

Mr. Heffer: asked the Minister of Public Building and Works if he is satisfied that no discrimination on the grounds of religion or race is permitted to apply in the engagement and promotion of workpeople by his Department in Northern Ireland; and if he will make a statement.

Mr. Loughlin: Yes, Sir. The Department's recruitment and promotion procedures throughout the United Kingdom are based on the merit, qualifications, experience and general suitability of candidates for the posts concerned without any discrimination on grounds of religion or race.

Mr. Heffer: Can my hon. Friend say whether everything possible in Northern Ireland has been done to ensure that there is no discrimination in Northern Ireland as far as his Department is concerned?

Mr. Loughlin: I can assure my hon. Friend that, as far as it is possible to discover, there is no evidence that there has been in my Department any form of discrimination. To ensure that there could not be the possibility of criticism of any kind, we reviewed and strengthened the whole of the procedures, and I am now convinced that it would be very difficult indeed for anyone to criticise us on this matter.

Mr. Fitt: Would the Minister agree that it is of the utmost importance that his Department, and, indeed, all other Departments of this Government, should give a lead in this matter so that it can be shown that they are acting in a nondiscriminatory manner which will make it more difficult for other agencies in Northern Ireland, at local level and at Stormont, to carry out the practice of discrimination?

Mr. Loughlin: I will accept that it is the responsibility of Government Departments to give a lead in this matter. As far as my right hon. Friend and I are concerned, there will be no suspicion of any kind—at least, as long as we are in the Department—that anyone has been discriminated against on the question of religion.

Sir G. Nabarro: Is the hon. Gentleman aware that the Ministry of Technology has now adopted the practice, when invitations to tender are sent out to private contractors, of drawing attention, on the invitations, to the requirements of the Race Relations Act? Is this general Government practice, and is it being done by the Ministry of Public Building and Works with invitations to tender in Northern Ireland?

Mr. Loughlin: Well, what the Question is about, of course, is—[Laughter.] I will deal with the supplementary question. The Question is about the recruitment and promotion of staff in our Department. I have answered that. I do not think the supplementary question arises as far as Northern Ireland is concerned.

Building Industry (Credit Restrictions)

Mr. Costain: asked the Minister of Public Building and Works what further representations have been made to him about the effect on the building industry of the Government's credit squeeze; and whether he will make a statement.

Mr. Silvester: asked the Minister of Public Building and Works if he will now make a further statement on his discussions with the construction industry regarding credit difficulties for builders.

Mr. John Silkin: I have nothing to add to my reply to the hon. Members for Hornsey (Mr. Rossi), Clitheroe (Sir Frank Pearson) and Londonderry (Mr. Chichester-Clark) on 12th November, 1969.—[Vol. 791, c. 389–90.]

Mr. Costain: Does not the Minister appreciate what a disappointing answer he has given? Does not he realise that the credit squeeze has caused a serious drop in house building and that as long as the Government insist upon this fraudulent S.E.T., which is costing more than £150 a house, he is restricting much needed house building?

Mr. Silkin: I have on a number of occasions tried to deal with this question, and each time I have said that if I am given personal examples of builders who are facing great difficulties caused by the credit squeeze, I shall be happy to look into them. During the past months I have not received a single notification. While I accept that builders are in some

difficulties, and have great sympathy with them, I wish that hon. Gentlemen opposite would give me a little more evidence.

Mr. Silvester: Did not the Minister see a reference in The Times to the N.E.D.C. report on construction, which suggests that the decline in house building will continue and that one of the main reasons for the decline will be the credit restrictions and the financial difficulties of builders? Is not that some evidence for him to consider?

Mr. Silkin: As I have said, I am aware of the difficulties facing builders. Whether those difficulties are caused by the credit squeeze or by a lack of mortgage finance, which from March of next year should not present much difficulty, is often debated. I fully appreciate that house building is not in a perfect situation at the moment, and I am willing to give all the help I can. One practical way in which I have given help is by seeing that my Department promptly pays all its accounts. I wish that this lead were followed generally.

Mrs. Renée Short: As my right hon. Friend is aware of the difficulties, what representations is he making to his right hon. Friend the Chancellor of the Exchequer about the need to reduce the interest rates? If he wants more evidence about the difficulties of the housing industry generally, I suggest that he reads the report of the Estimates Sub-Committee that dealt with housing sub sidies, which was published last Thursday. There is plenty of evidence there.

Mr. Silkin: If my hon. Friend thought that I was after evidence, I have not been as clear as I would have wished. I said that I would like cases to be put to me of builders who had personally been in difficulties because of this, and that I would try to help. I gave an example of practical help by the prompt payment of accounts. On the general position of the Chancellor of the Exchequer, I repeat that builders play their part as members of the community and most of them are patriotic enough to accept this situation. As the economy of the country improves, so I hope will their position.

Mr. Chichester-Clark: Will the Minister say whether either he or his


predecessor, in response to requests made earlier this year, has made representations to the Treasury for house builders to be put in the category of priority bank loans, and what was the result of those representations? If those representations were not successful, will he make further representations?

Mr. Silkin: I think the building trades employers are perfectly capable of making their own case, as they have, and very well. Obviously my right hon. Friend the Chancellor of the Exchequer and I consider the matter. But I go straight back to the main question, which is to get the economy straight, and that is a matter for my right hon. Friend.

Building Industry (Metrication)

Mr. Charles Morrison: asked the Minister of Public Building and Works what estimate he has made of the economic effect on the building industry of metrication; and whether he will make a statement.

Mr. John Silkin: It is too early to give an estimate, but the rationalisation of the construction industry as a result of the change to metrication will far outweigh the once-and-for-all conversion costs.

Mr. Morrison: Will the Minister say when an estimate will be available, and will he ensure that the estimate gives the increased cost to the customer as well as to the industry?

Mr. Silkin: I will certainly bear that in mind as we go along. I do not think I can say when the estimate will be available between now and 1972, when the construction industry will go fully metric, but I will keep the hon. Gentleman informed.

Building Industry (Bankruptcies)

Mr. Charles Morrison: asked the Minister of Public Building and Works what was the number of bankruptcies in the building industry in 1969 to the latest convenient date; and whether he will make a statement.

Mr. John Silken: I would refer the hon. Member to my reply to the hon. Member for Dudley (Mr. Donald Williams) on 19th November, 1969.—[Vol. 791, c. 319.]

Mr. Morrison: Is the Minister aware that from the beginning of 1965 to the

end of September this year no fewer than 3,650 builders have gone bankrupt? Is not this an extremely serious situation which emphasises the Minister's responsibility for making representations to the Chancellor of the Exchequer that builders should be put into the priority class of borrowers?

Mr. Silkin: Any bankruptcy, particularly one in the construction industry, is a matter of grave concern to the country, but the number of bankruptcies this year and last year are not at variance with those of previous years.

Mr. Heffer: Will my right hon. Friend say how large were the building firms that went bankrupt? It is well known that bankruptcies of small builders who have one ladder and a wheelbarrow have been occurring ever since the building industry began.

Mr. Silkin: In an industry that has 89,000 builders, it is almost inevitable that the majority of bankruptcies should be of the sort described by my hon. Friend.

Mr. Speed: The Minister said that the figures were not at variance with those for previous years, but in 1965 there were 644 bankruptcies, and the figure was running at the rate of 860 in 1967 and 833 in 1968. How many bankruptcies must there be before the Minister shows concern?

Mr. Silkin: I thought I had shown considerable concern; perhaps the hon. Gentleman was not listening to me. The number of bankruptcies for the first nine months of this year, to 30th September, was 569, which is not a variance with previous years.

Oral Answers to Questions — SCOTLAND

Nurses (Pay)

Mr. William Hamilton: asked the Secretary of State for Scotland what representations he has had in the last two months on the question of nurses' salaries; and if he will indicate the terms of his reply.

The Secretary of State for Scotland (Mr. William Ross): Representations have been received from the Scottish Board of the Royal College of Nursing, from four Members of Parliament and


from five outside bodies. In replying, I have explained that, while the views expressed have been noted, it would not be appropriate for me to comment further at this stage when a pay claim is under consideration by the Nurses and Midwives Whitley Council, which is responsible for the negotiation of nurses' pay.

Mr. Hamilton: The House will be gratified to notice that the Government have referred to lower-paid workers and their exclusion from the terms of the White Paper on Prices and Incomes. In that context, will my right hon. Friend give a categorical assurance that the Government will not restrict the nurses to the 2½ per cent. wage freeze to which they were subjected under the previous Administration in the 1960s?

Mr. Ross: My hon. Friend wants me to do what I said I should not do, and that is to comment upon pay negotiations when they are in progress. I think my hon. Friend knows my feelings and my sympathies generally on this issue.

Mr. Gordon Campbell: Will the right hon. Gentleman tell us about the timing of these negotiations, and when it is expected that a conclusion will be reached, as many people in Scotland are concerned that the pay and conditions of nurses may be falling behind those of other more vociferous groups?

Mr. Ross: I think that the hon. Gentleman is aware from his knowledge and experience that the rates of pay are to be reviewed from 1st April and that negotiations are going on now.

Forth Road Bridge

Mr. William Hamilton: asked the Secretary of State for Scotland what recent representations he has received on the need to designate as trunk roads the approach roads to the Forth Road Bridge; and what reply he has sent.

Mr. Adam Hunter: asked the Secretary of State for Scotland what representations he has received recently from local authorities asking him to have the cost of the approach roads excluded from assessment of the total cost of the Forth Road Bridge, so that toll charges might be reduced.

Mr. Ross: I have received no such representations recently.

Mr. Hamilton: That may be true, but my right hon. Friend knows that repeated representations have been made by Members of this House and by local authorities on this question. If these roads were designated as trunk roads, whilst there might still be a need for some tolls on the bridge they would not need to be increased as they were recently.

Mr. Ross: I have had representations in the past and I have also had Questions, and my hon. Friend will appreciate that I have also given answers in the past. The answer that I give today will be no better than the ones that I gave before. The inclusion of the approach roads was part of a bargain which included an outright Government grant of £4,650,000 and the waiving of interest amounting to £1·66 million during construction. This was a fair and generous arrangement, and I am not prepared to reopen the matter now.

Several Hon. Members: rose—

Mr. Speaker: Order. It would help the Chair to know of groupings in advance. Mr. Hunter.

Mr. Hunter: Is my right hon. Friend aware that a number of local authorities on both sides of the river feel that it is fair and reasonable that such a gesture should be made? Does he agree that if this were done the Fife County would benefit greatly, being in a development area?

Mr. Ross: I am sure that the people locally would benefit, but it would be at the expense of the construction of roads in other parts of Scotland.

Criminal Cases (Appeals)

Mr. Mackintosh: asked the Secretary of State for Scotland how many criminal cases have been heard on appeal in the Court of Session in the last three years; and how many of these appeals have been successful.

Mr. Ross: Details of appeals to the High Court of Justiciary are contained in the Criminal Statistics, Scotland, for 1968, which was published as Cmnd. 4125 in September last.

Mr. Mackintosh: I thank my right hon. Friend for drawing my attention to this publication. Is he aware that these figures show a small number of


successful appeals in Scotland compared with 58 per cent. of successful criminal appeals in the same three-year period in England? Does he agree that this cannot be explained by any simple suggestion that the English courts are totally inefficient and the Scottish courts totally efficient, and that this matter merits some concern?

Mr. Ross: It may merit some concern to my hon. Friend, but it is far too immediate a conclusion to be drawn from this quick comparison. There are differences in court structure and practice in the two countries. To the extent that any inquiry is needed, I would remind my hon. Friend of the decision, announced in the House on 3rd December, by my noble Friend the Lord Advocate and myself to appoint a Departmental Committee on Criminal Procedure under the chairmanship of Lord Thomson, the terms of reference of which will cover appeal procedures.

Mr. Wylie: Does the right hon. Gentleman agree that one of the crucial distinctions between the two legal systems is the almost entire reliance in the Scottish system placed on professional judges and the minimal reliance placed on lay jurisdiction, and that that could readily explain the apparent difference in the number of successful appeals?

Mr. Ross: The existence of a professional judiciary dealing with summary cases throughout Scotland might be expected to produce a different result from the position in England.

Reservoirs (Boating)

Mr. Monro: asked the Secretary of State for Scotland on how many reservoirs owned by water undertakings in Scotland boating is now allowed; and how many have rules or bye-laws.

Mr. Ross: Boating is allowed on two reservoirs and fishing from boats on 85. No bye-laws have yet been made under Section 63 of the Countryside (Scotland) Act, 1967.

Mr. Monro: Does the Secretary of State agree that this is a disappointing amount for boating and for tourism and recreation? What positive efforts have the Countryside Commission and the Government made to encourage water

authorities to increase the available facilities?

Mr. Ross: The record is not as bad as all that, remembering that the bulk of the population of Scotland is pretty near other forms of water. For the hon. Gentleman's satisfaction I have drawn the board's attention to its powers under the Countryside Act to permit the use of land and water in which it has an interest for any form of recreation. It will shortly have discussions with the Countryside Commission for Scotland about this matter.

Mr. Maclennan: Does my right hon. Friend accept that the public ownership of waters in Scotland is widely regarded as vital for the provision of recreational facilities and that the proposed sale by the North of Scotland Hydro-Electric Board of the River Shin fishing in my constituency has caused widespread dismay and anger throughout the Highlands? Will he, therefore, intervene to stop the sale going through?

Mr. Ross: I think that my hon. Friend ought to see what powers I have in respect of many of the matters that he asks me to do. However, this matter is not covered by this Question.

Part-time Education

Mr. Edward M. Taylor: asked the Secretary of State for Scotland how many children were receiving part-time education at the most recent date for which figures are available; what percentage of this total was in Glasgow; and what were the comparable figures for the same date in each of the previous three years.

Mr. Ross: At end October, out of a total of about 926,000 pupils, the number on part-time education was 8,734, the majority of whom were losing less than one day per week. Twenty-eight per cent. of all the pupils affected were in Glasgow.
Exactly comparable figures for earlier years are not available, but the total number of pupils affected were 2,536 in October, 1966, 3,612 in October, 1967, and 2,383 in September, 1968.

Mr. Taylor: Is it the case that the number of children affected appears to have increased substantially this year compared with previous years? Will the Secretary of State see that in future we


get rid of the scourge of part-time education in schools?

Mr. Ross: The hon. Gentleman should appreciate that we are working towards this end. We have recruited a greater number of teachers than ever before. Since 1964–65 the number has gone up by 3,500, and the entry of students to colleges of education is at a record level.

Mr. Hugh D. Brown: While recognising the efforts made by the Government, and in particular the substantial incentive payments for teachers to teach in areas of acute shortage, may I ask my right hon. Friend to use his considerable powers of persuasion to encourage local authorities which are well staffed to operate a fairer system than they are now doing?

Mr. Ross: My hon. Friend should realise that we have been doing this over a considerable period and we are getting a certain measure of generous co-operation.

Mr. MacArthur: For how long will the right hon. Gentleman accept this totally unacceptable and worsening position? What further steps does he propose to improve staffing in these schools?

Mr. Ross: The only way to improve staffing is to get more teachers. We have 3,500 more teachers than we had in 1964. We are recruiting teachers to the profession, and entry to the colleges of education is at a record level.

Crimes of Violence and Murders

Mr. Edward M. Taylor: asked the Secretary of State for Scotland what was the to al number of crimes of violence and murders, respectively, made known to the police in the most recent 12-month period for which figures are available; and what were the comparable totals in the same 12-month period five, 10 and 15 years previously.

Mr. Ross: The number of crimes of violence made known to the police in Scotland in the 12-month period ending 30th September, 1969, was 3,478. The comparable totals in the year ending 30th September, 1964, 1959 and 1954 were 2,177, 1,398 and 849 respectively. The latest corrected figure of murders made known to the police in Scotland in the year ending 31st December, 1968, was 37,

and the comparable totals for the year ending 31st December, 1963, 1958 and 1953 were 14, 15 and 14.

Mr. Taylor: Does the Secretary of State agree that the figures for crimes of violence are quite frightening and show an alarming increase? Does he recall telling one of my hon. Friends on 2nd December that assaults on police officers in the course of their duties last year were more than half as great as in any of the previous 10 years? Now that Parliament has abolished capital punishment, what further steps does he propose to take to protect police officers in the course of their duties?

Mr. Ross: The hon. Gentleman should not anticipate decisions elsewhere. This House has decided its attitude. The hon. Gentleman should be reasonably fair about it. We have put in a tremendous effort and we have had co-operation from the police, public and local police authorities. We managed to stabilise these figures last year, and this year they are showing a decline of just short of 5 per cent.

Planning Appeals (Wheatley Commission Recommendations)

Mr. Gordon Campbell: asked the Secretary of State for Scotland if he will seek to postpone the changes in the appeals procedure contained in the Town and Country Planning (Scotland) Act, 1969, in view of the recommendations of the Wheatley Commission.

Mr. Ross: I do not at present propose to seek Parliamentary approval for bringing Part III of the Act into operation.

Mr. Campbell: That is good news as far as it goes. But since the Wheatley Commission confirmed unanimously and unequivocally the views which we on this side of the House pressed, will the Government now ensure that no system is introduced whereby the same body is the final judge in cases to which it is also a party?

Mr. Ross: I do not know how local government reorganisation affects this at the moment. It is far too early to anticipate decisions which may be taken concerning functions in reorganisation.

Actions Against Police

Mr. Dewar: asked the Secretary of State for Scotland whether he will implement that section of the Police Act 1964 which would enable a person to sue a chief constable as representing a police authority rather than the individual police officer against whom he may have grounds for action.

Mr. Ross: Yes, Sir. The relevant legislation is now Section 39 of the Police (Scotland) Act, 1967, and I have made an Order bringing this section into operation on 1st January, 1970.

Divorce Law Reform

Mr. Dewar: asked the Secretary of State for Scotland what plans he has to implement the proposals for divorce law reform contained in the Scottish Law Commission Report, "Divorce—the Grounds Considered", Command Paper No. 3256.

Mr. Ross: This has never been thought a suitable subject for Government legislation but I have made it clear on a number of occasions that I should be willing to consider a request for drafting assistance should an hon. Member come forward with a Bill on lines which appeared likely to be generally acceptable.

Mr. Dewar: Does my right hon. Friend agree that it is not a matter of drafting as much as a matter of time that is at issue, and that when so many representations have been made, from the Scottish Law Commission, the Church of Scotland and the Law Society of Scotland, it would be very unsatisfactory if Scots Members were not given a chance to come to a decision on this important matter in the same way as English Members last Session?

Mr. Ross: My hon. Friend should appreciate that he must obtain the will of the House in respect of the principle, on Second Reading. The last occasion when this was done in respect of Scotland was when a former hon. Member—Mr. Forbes Hendry—managed to obtain a Second Reading on the nod on a Friday afternoon.

Mr. Edward M. Taylor: Will the Secretary of State refrain from the bad habit

of other Government Ministers of providing time for selected Private Members' Bills, and instead treat all such Bills on their merits? Will he not give preference to divorce Bills or other hobby horses of hon. Members such as the hon. Member for Aberdeen, South (Mr. Dewar)?

Mr. Ross: If we are to treat all Bills on their merits we must remember that some may merit special treatment.

Sir M. Galpern: Is my right hon. Friend aware that, despite the report of the Scottish Law Commission on divorce reform, there is widespread opposition in Scotland to any fundamental change in the divorce law, especially on the question of unilateral divorce after separation for five years?

Mr. Ross: That is a valid point. That is why I say that this matter requires the consideration of the House.

Tower Blocks (Strengthening)

Mr. Buchanan-Smith: asked the Secretary of State for Scotland what further representations he has had from local authorities regarding his offer to meet part of the cost of remedial work and other expenditure incurred in strengthening multi-storey blocks of flats.

Mr. Ross: At a meeting with my noble Friend the Minister of State the local authorities concerned asked for a higher rate of grant than 40 per cent. and made representations about the method of calculating the expenditure eligible for grant. I hope to announce a decision shortly.

Mr. Buchanan-Smith: When will the right hon. Gentleman make an announcement on this? Does not he realise that certain local authorities face very high costs? Will he give an assurance that he will limit the amount that will be passed on to the ratepayer?

Mr. Ross: What the hon. Member says is true, but he and many others who sit with him are constantly telling me about Government expenditure. I hope that he will support us when we make increases. I appreciate the difficulties, but we are in consultation on the matter and I shall make a decision as soon as I can.

Mr. Dempsey: Will my right hon. Friend bear in mind that the Coatbridge Town Council suffers very badly from


the 60–40 per cent. ratio, in view of the high-rise flats in the town which have had to be strengthened? Can he say whether the announcement that he will make shortly will be of a much more generous contribution than the 40 per cent. that has been contributed hitherto?

Mr. Ross: I am afraid that I cannot anticipate the announcement that I shall make.

Mr. Gordon Campbell: Will the right hon. Gentleman accept that this is not a question of increasing public expenditure? This must be paid for either out of local expenditure or central expenditure.

Mr. Ross: I accept that.

Electoral Register

Mr. Buchanan-Smith: asked the Secretary of State for Scotland if he will extend the period for appeals from persons who consider themselves eligible for the new electoral register but whose names do not appear on it.

Mr. Ross: The period for claims and objections has now expired. I did not feel justified in proposing regulations to extend it since, if this were done, electoral registration officers might be unable to publish the register on 15th February as required by Statute.

Mr. Buchanan-Smith: Is the right hon. Gentleman aware that all the reports from the electoral registration officers indicate that many thousands of young people who should have registered as eligible were not included in the original lists? Can he say what is being done to make sure that these young people are registered in the way that they are entitled to be?

Mr. Ross: I admit that concern was expressed in the reports that I heard. It came also from electoral registration officers. Despite the care with which they conducted the canvass, they have not succeeded in getting the names of all young persons who are qualified. There has been a period from 28th November to 16th December in which to rectify the position. Efforts have been made by way of national and local publicity, including radio and television broadcasts, to try to get a

better result. I hope that we shall see some improvement resulting from it.

Mr. Hugh D. Brown: Can my right hon. Friend be a little more encouraging? Is he aware that in some instances the omissions have been as high as 50 per cent. among young people? Nothing could be more disillusioning than for a young person wishing to vote to find his name not on the roll. Would my right hon. Friend make some special provision in this case, because of the peculiar nature of the problem?

Mr. Ross: We are governed by Statue in respect of all the steps that we can take. As soon as we realised that there was this considerable gap—and my hon. Friend played his part by telephoning secondary schools about it—all that we could do was to make special efforts to bring it to the attention of young people. We cannot do more. The initiative from then on rests with them.

Oral Answers to Questions — HOUSE OF COMMONS

Direction Signs for Visitors

Dr. Gray: asked the Lord President of the Council if he will improve the sign-posting system in the House of Commons for visitors.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): There is already a fairly full system of sign-posting in the House of Commons. If the hon. Member has any particular point in mind perhaps he would let me know.

Dr. Gray: Is my right hon. Friend surprised to hear that some officials from the Consumers Association spent over 15 minutes trying to find their way to the Ministerial Conference Room on the ground floor; that they asked many people, including four policemen, and nobody knew where it was? Will he consider improving facilities for both visitors and Members to enable them to find their way round this charming but extremely archaic building?

Mr. Peart: I was not aware of this until now. I cannot clutter up the House of Commons with signposts as though it were Clapham Common.

Mr. John Hall: In view of the uncertainty of the result of tonight's vote, is it not important to have a signpost pointing to the right Lobby for Members on the Government benches?

Mr. Peart: Signposts are apparently in the hon. Member's mind. It is up to each hon. Member to do what he wishes.

Refreshment Department (Complaints Book)

Sir C. Taylor: asked the Lord President of the Council how often he studies the Refreshment Department's complaints book; and when this was last brought to his notice.

Mr. Ensor: I have been asked to reply.
The Lord President does not study this book personally, but it is examined daily by the Manager of the Refreshment Department, and those complaints which he considers should be seen by the Catering Sub-Committee are brought before it.

Sir C. Taylor: This is not good enough. The Chairman of the Catering Sub-Committee should study this book. The Chairman will correct me if I am wrong, but I understand that he was not aware of the existence of this book until this Question was put down. Does he take any action about complaints that are put into the book?

Mr. Ensor: With great respect to the hon. Member, I have more individual hon. Members and right hon. Members talking to me about problems and complaints than are ever likely to appear in any complaints book. I would have thought that personal contact between myself as Chairman of the Catering Sub-Committee and Members was far more valuable than any complaints book.

Mrs. Ewing: Is the Chairman of the Catering Sub-Committee aware that the complaints book has been lost? I should like to find it, in order to write in it some very complimentary remarks about the pleasantness of the servants of the House.

Mr. Ensor: I am sure that the hon. Lady will be delighted to look for it—and I will help her.

Supplementary Benefit System (Select Committee)

Mr. Onslow: asked the Lord President of the Council whether he will move to set up a Select Committee to investigate recent allegations of fraudulent abuse of the supplementary benefit system.

Mr. Peart: No, Sir.

Mr. Onslow: Since one of the most serious features of these allegations was that abuses have been known within the Ministry but have been covered up, is it a satisfactory position that the Ministry should remain judge and jury in a case of this kind?

Mr. Peart: I think that my right hon. Friend and his Department have made their position quite clear. I do not wish to set up another Select Committee. I have set up so many Select Committees in the past—[Interruption.] The hon. Member must listen to my answer. If he wants to stand up and ask a supplementary question I do not mind. I have a long list of Select Committees here, and I am not going to set up another one.

Mr. Crawshaw: Does not my hon. Friend agree that, few as these abuses are, they tend to discredit the whole social security system in the eyes of the public? In seeking to deal with these abuses will he be careful not to return to such a close system of vigilance that people who ought to seek assistance refuse to do so?

Mr. Peart: That is an important point. But I am not setting up a Select Committee.

PARLIAMENTARY PAPERS (SUPPLY)

Mr. Maudling: Mr. Maudling (by Private Notice) asked the Chief Secretary whether he will make a statement about the dispute in H.M.S.O. which is holding up the supply of Parliamentary Papers.

The Chief Secretary to the Treasury (Mr. John Diamond): I regret that there are delays in the supply of certain papers due to a minor dispute on overtime in the Parliamentary Press. Every effort is


being made to resolve this dispute and to avoid inconvenience to hon. Members.

Mr. Maudling: Is the right hon. Gentleman aware that it is very depressing that this should happen all over again? Is there not one specially important feature on this occasion? Am I right in saying that HANSARD for yesterday is not available? Will not the debate beginning today in another place be prejudiced thereby?

Mr. Diamond: It is not happening "all over again", and I am sorry that the right hon. Gentleman uses such exaggerated language. Nor is it the case that in another place a debate will start without an adequate number of copies of HANSARD. HANSARD is being printed. So far, 150 copies have been delivered. In fact, 100 were delivered at 3 o'clock. By half-past four, 400 copies will have been delivered to the House of Commons.
I agree that this represents some inconvenience, but, to put the matter in context, I would add that there has been a great deal of pressure of parliamentary printing. There has been the problem of catching up and getting up to date. I am grateful to all concerned at all levels, both management and men, for their efforts.

Mr. Shinwell: There have been disputes of various kinds when the Government have instituted committees of inquiry into the nature of the disputes with a view to mediation. Has that been done in this dispute and, if not, why not?

Mr. Diamond: No, it has not been done in connection with this dispute. This is a very minor dispute about—[Interruption.] It has nothing to do with the matters raised a month ago. I am sorry that hon. Gentlemen opposite are trying to create greater difficulties than exist. This is a minor dispute arising out of the amount of time that free individuals are being asked to put in by way of overtime. I would have thought that it was a matter for consideration. It is obviously for the convenience of the House that the necessary overtime should be put in to enable hon. Members to avoid any inconvenience. That is what I am trying to achieve.

Mr. Turton: Although this is a minor dispute, it is a major contribution to the inefficiency of the House. Will the right

hon. Gentleman consider whether the time has not come when a private enterprise firm should be offered the job of printing our papers?

Mr. Diamond: Full consideration has been given to the second part of the right hon. Gentleman's question.
With great respect to the Father of the House, may I say that I am not aware of the very great difficulties which he indicated in the first part of his question? I do not know to what he is referring.

Sir R. Cary: The last dispute a month ago was a matter of the greatest inconvenience to Parliament. Is the right hon. Gentleman saying that the dispute which arose last night is completely unrelated to that which took place before?

Mr. Diamond: The answer is, Yes, Sir.

Mr. Lubbock: Without entering into the merits of the dispute and bearing in mind what the right hon. Gentleman said about the present one being unrelated to the stoppage which took place a month ago, do not the two together indicate that he should make alternative arrangements to ensure that the work of Parliament is not disrupted whenever these disputes occur, for whatever reason?

Mr. Diamond: They indicate that a wise Government would take all necessary steps. I think that I belong to a very wise Government.

Mr. W. H. K. Baker: Does the right hon. Gentleman realise that this shortage is not exclusive to HANSARD, but also affects the reports of Standing Committee proceedings? Can he say when copies of the OFFICIAL REPORT of yesterday's Agriculture Standing Committee will be available to hon. Members?

Mr. Diamond: The papers needed for the Standing Committee have been provided.

Mr. MacDermot: Is my right hon. Friend aware that those of us who have some knowledge of the difficulties with which the Stationery Office has had to contend over a period of 10 or more years —difficulties of which the right hon. Member for Barnet (Mr. Maudling) is well aware—will consider that this occasion perhaps calls for some degree of forbearance on the part of the House?

Mr. Diamond: I am grateful to my hon. and learned Friend, who speaks with great knowledge and authority on these matters.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. Mr. Cledwyn Hughes. Statement.

ORGANOCHLORINE PESTICIDES (WILSON REPORT)

The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes): With your permission, Mr. Speaker, and that of the House, I would like to make a statement about the further review of persistent organochlorine pesticides.
The Report of the Advisory Committee on Pesticides and other Toxic Chemicals is published today and copies are available in the Vote Office. My right hon. Friends and I are most grateful to Professor Andrew Wilson and his colleagues for their work in this complex field.
The committee concludes that, although a number of persistent chemicals are present in the environment, there is no evidence that this has adverse effects on man. Nevertheless, the presence of these chemicals such as dieldrin, aldrin and D.D.T., even in low concentrations, is undesirable. The committee recommends the withdrawal as soon as practicable of certain current uses of these chemicals for which adequate alternative and less persistent chemicals are available.
The Government accept these recommendations. We shall implement those relating to agriculture, horticulture, food storage, home gardens and kitchens, in the co-operation with the industry, through the Safety Precautions Scheme. I am glad to say that manufacturers and users have assured me of their co-operation.
The main changes are as follows. As proposed in the report, aldrin, dieldrin and D.D.T. will be withdrawn from use on a number of crops. D.D.T. will not be sold in small packs to the home gardener. Dieldrin and D.D.T. will be withdrawn from certain uses in food storage and in the home kitchen and larder. I hope that these uses will be phased out by the end of next year.
On certain other uses of these chemicals in hygiene and public health, timber

preservation and the commercial moth proofing of wood, the committee recommends that further studies and surveys are required. This will be done.
The committee also recommends that, after the action which I have announced has been taken, all the remaining uses of these chemicals covered by the Pesticides Safety Precautions Scheme should be kept under review, so that, wherever possible, they can be replaced by less persistent chemicals. This also will be done.

Mr. Stodart: There is no doubt, as the right hon. Gentleman has said, that this is a complex matter. We shall certainly study the report with considerable interest. Meantime, I ask three questions.
First, which are the commodities and foods in which dieldrin, aldrin and D.D.T. are most likely to be found?
Secondly, although, as I said when the Minister made his announcement on the Swann Report, economic considerations must always take second place to any health aspect, is the withdrawal of these chemicals likely to lead to any fall in productivity and consequent increase in costs?
Thirdly, do the Government propose to stop the import of food in the production of which these chemicals have been used, to prevent the British consumer from suffering adverse effects which this restriction on home producers is intended to stop, and also to prevent the British producer from being placed at a disadvantage in our own market?

Mr. Hughes: The amount in foodstuffs is very small indeed, and it is in those foodstuffs where D.D.T. is used as a pesticide. I will not give the House the list; it is a long one. If the hon. Gentleman will study the report he will see the foodstuffs involved.
On the question of costs, the committee has rightly taken the view that it should first consider the alternatives before recommending a restriction on the use of pesticides. Because of this approach, the cost to the horticultural and agricultural industry should be very small.
As to imports, there is already a marked trend away from organochlorine pesticides in developed countries, and we already have legislation safeguarding


the food we eat. Recent surveys in the United Kingdom to determine the actual levels of residues in the whole diet and in specific foodstuffs has shown these levels to be reassuringly low. In 1966–67, the amount of D.D.T. used in Britain was 200 tons. In the United States it was 27,000 tons.

Mrs. Joyce Butler: Will my right hon. Friend consider publishing this highly technical report in layman's language with some guidance as to safer alternatives for use by housewives, gardeners and farmers so that they can act as their own watchdogs?
Why has not my right hon. Friend imposed an outright ban on D.D.T., as other countries have done, in view of the appalling way it spreads through the environment from its original source?

Mr. Hughes: I shall be glad to consider my hon. Friend's suggestion about a simple guide, because the report is very complex, as she says.
Several other countries have announced restrictions on D.D.T., but most countries are keeping it for those uses that they consider vital. Our approach to these pesticides is based on the best scientific advice for our situation.

Mr. James Davidson: Can the Minister give the House an assurance that satisfactory progress has been made with the development of alternative chemicals which will be equally effective, if less potentially dangerous, for agricultural, horticultural and domestic use?

Mr. Hughes: The committee examined the use of each pesticide with very great care and with particular attention to this point before making its recommendations. For example, the committee recommends that D.D.T. should not be used for the control of aphids—that is, green fly of various varieties—because proven alternatives are available and offer better control. The alternatives are elaborate and differ from case to case. I refer the hon. Gentleman to the report, because it would take too long for me to go into detail.

Mr. Alfred Morris: I congratulate my right hon. Friend on the prompt action he has taken in this as in other matters. Are his decisions fully consistent with what is being done in other countries?

Mr. Hughes: Yes, Sir. The committee emphasises that its recommendations are based on its assessment of the situation in this country alone. Conditions of climate, public health, hygiene and agriculture in other countries may make the use of these pesticides very much more desirable. For example, in tropical countries with high mortality from insect-borne disease and food damage by pests the advantages of these pesticides may well outweigh the disadvantages.

Mr. Scott-Hopkins: I welcome what the Minister has said. It will put into proportion some of the rumours which have been circulating about the dangers of these substances. Do the Government intend to take any measures to supervise the existing measures?
What are the Government doing to ensure that we do not import foods which have been grown with the use of these chemicals? What checks are there abroad and at our ports?

Mr. Hughes: Again, the report covers the whole diet, including imported foods. There is a reference to this on page 16 of the report. I am advised that there is no case for discontinuing imports on the grounds of health hazards. I would refer the hon. Gentleman to Appendix VI of the report.

Mr. Driberg: Without indulging in unscientific generalisations, can we say that we ought perhaps to be a little more sceptical about the quickly boosted miracles of science and technology?

Mr. Hughes: I think that we should admire the advances that are being made in the scientific and techological fields, but the machinery which the Government have set up ensures that the public are protected against a too quick use of these new discoveries. The important thing is that we should take action in these matters, as the Government have done, where there is a likelihood of danger. The action we have taken is preventative and curative.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. Mr. Ennals. Statement.

Mr. Temple: On a point of order. The Minister, in making his statement, said that copies of the report of the committee were available in the Vote Office.


No doubt they were available, but they were not available to hon. Members.
I seek your guidance, Mr. Speaker, because in these extraordinarily technical matters it is difficult to frame a sensible question if the report in question is not available.
I respectfully submit that in these circumstance it might be very much more helpful to hon. Members on both sides if, in advance of a statement being made, copies of a report of this technical nature were available to hon. Members so that they could ask more intelligent questions.

Mr. Speaker: I thought that the questions were intelligent. I imagine that the Minister, when he announced that copies of the report were in the Vote Office, thought that they would be there. Their absence may be connected in some way with the dispute—I do not know.

Mr. Scott-Hopkins: Further to that point of order. The White Paper referred to is in the Vote Office, but, on the Minister's order, it was not allowed to be released. I support the submission made by my hon. Friend the Member for City of Chester (Mr. Temple) that papers which are so technical as this one should be released a quarter of an hour, 20 minutes, or half an hour, before the Minister is due to make his statement.

Mr. Hughes: Further to that point of order. It was my clear understanding that copies of the report were available in the Vote Office at 11 o'clock this morning. [HON. MEMBERS: "No."] If that was not the case, I apologise to hon. Members on both sides, because I agree that this is a complex matter. I will make inquiries.

Mr. Speaker: I am sure that the House will accept the Minister's statement.

Mr. Stodart: I attempted to get a copy of the report and was told that it was not to be available until the Minister had made his statement.

NATIONAL SUPERANNUATION AND SOCIAL INSURANCE

3.48 p.m.

The Minister of State, Department of Health and Social Security (Mr. David Ennals): With permission, Mr. Speaker, I would like to make a statement.
Yesterday, the Government presented a Bill to replace the existing national insurance scheme with a system of earnings-related national superannuation and social insurance which will bring about a great improvement in the provisions for retirement, widowhood and long-term sickness. The Bill, together with an explanatory White Paper and a report by the Government Actuary, will be available in the Vote Office this afternoon.
The Bill implements the proposals which were published in three White Papers earlier this year—two of which have already been debated in the House. We have recently published a booklet entitled "The New Pensions Scheme" which summarises the three White Papers. There are, however, some changes and additions included in the Bill to which I wish to draw the attention of the House.
The Bill sets out the rate and conditions for the new attendance allowance. The weekly rate will be £4. I want to make it clear that we have quite deliberately concentrated on the most seriously disabled—people who need a great deal of care day and night. We are dealing with a relatively small and identifiable group and we intend to make sure that as far as possible all of them get the allowance. This includes housewives, on their own or their husbands' insurance; and the parents of severely disabled children. The older congenitally disabled will normally be eligible through the supplementary benefit scheme.
Next, contributions. The contribution for the National Superannuation Fund is as set out in the January White Paper and that for the Social Insurance Fund as foreshadowed in the July White Paper. This brings us to the National Health Service contribution. At present, the burden of the flat-rate levy towards the cost of the health service falls largely on the employee. He pays 3s. 2d. a week compared with 8d. paid by his employer. This is an obvious anomaly and our original proposal was to split the new health service contribution equally.
We have now decided that the employer should pay the larger part, in common with the practice in many advanced industrial countries, particularly of the E.E.C. We intend that the contribution towards the new National


Health Service levy should be 0·6 per cent. of earnings from the employee and 0·3 per cent. from the employee. This will bring the employer's total contribution to 7 per cent. of his employees' earnings—a marginal increase in the figure foreshadowed in the July White Paper. This enables us to keep the employee's total contribution at 6¾ per cent. applying up to the earnings ceiling of £1,900 a year.
In relation to the preservation of occupational pensions on change of employment, we have not been able, as we had hoped, to cover pension rights accrued before the date on which the new legislation comes into operation. The sole reason for this is the opposition of the employers' representatives to what they describe as compulsory retrospective imposition of unforeseen liabilities which would severely damage the finances of pension schemes.
The legislation will, therefore, lay down that the requirement to offer a deferred pension will apply only to pension rights which accrue in respect of service after the operative date. Unfortunately, this means that it will be 40 years or more—a full working life—before all pension rights are protected. But this will not preclude voluntary provision of retrospection, and the Government, for their part, intend to set an example, in the three areas where they have direct responsibility for occupational pension arrangements, by preserving pensions earned by past service for those who leave the Armed Forces, the Civil Service and the National Health Service after the operative date.
The Bill also makes a change in the trade dispute disqualification for unemployment benefit. In the light of the views of the Donovan Commission, the Government are proposing to amend the law so that a person who is laid off because of a dispute at his workplace will not be deprived of benefit unless he is himself taking part in the dispute or directly interested in it.
We are also proposing to put on a statutory basis the long-standing practice under which, in determining the amount of supplementary benefit payable for a striker's family, his personal income, for example, income tax refunds or strike

pay, is disregarded up to the level of his personal requirements for which no provision is made.
The Bill also provides for measures to deal with certain areas where the supplementary benefit scheme may be said to be misused.
First, we shall deal with the situation which exists at the conclusion of a strike and before the striker receives his first wages after returning to work. As matters now stand, the striker, on return to work may be entitled to benefit for himself as well as for dependants for up to two weeks even though he is in paid employment. The result in some recent strikes has been that very large sums have been paid out after return to work, in one instance greatly exceeding the sum paid while the strike was on.
We have included a Clause in the Bill giving the power to make regulations under which the entitlement to supplementary benefit of a striker on return to work will be limited to exactly the same entitlement as when on strike.
Second, we propose to reduce the supplementary benefit entitlement of men who are disqualified for unemployment benefit because they are dismissed for industrial misconduct or leave their employment voluntarily or refuse suitable employment without good cause. At present, if such a man establishes a claim for supplementary benefit the benefit is normally reduced by 15s. but no more.
This deduction is too small to provide effective support for the disqualification provisions of the national insurance scheme and we therefore propose that the deduction shall be increased so that the claimant's requirements, and those of his wife if he has one, will be assessed at one-third less than the normal scale rate—rent and requirements of any children still being met in full.
Under these last two heads the discretionary powers of the Supplementary Benefits Commission to meet urgent need will be preserved intact. These measures, designed to end two clearly defined areas of misuse of the supplementary benefit scheme, linked together with the announcement on Monday of the appointment of 100 additional staff for the work


of unemployment review and special investigation, are further indications of the Government's determination to act firmly against abuse of our social security provisions.

Mr. C. Pannell: On a point of order, Mr. Speaker. I think that the statement which we have just heard rather outrages convention. Will you look at the question whether parliamentary statements of this sort should be made in the nature of a Second Reading speech which contains argument? I think that they should be straightforward expositions.

Mr. Speaker: I am not without sympathy for the point raised by the right hon. Member. I hope that when Ministers have to make statements they will make them as reasonably brief as possible, and possibly amplify them with arguments and details in the OFFICIAL REPORT.
I am conscious all the time, and this is my position, of the pressure of Parliamentary business. We have a very important debate ahead. Nearly every day I am in the position of wanting to push on to the business of the day.

Mr. Dean: Is the Minister aware that it is virtually impossible at such short notice to absorb such a very complicated and long statement? Is he aware that we welcome some aspects of his statement, notably the constant attendance allowance for the severely disabled, the move towards the preservation of pension rights in the public service, and measures to deal with abuse, but that we regret that the Bill appears to do nothing for existing pensioners, particularly the over-80s, and will damage occupational pension schemes and savings?
May I ask three short questions? First, how long will members of public service pension schemes be in the dark about their pension rights for future service? Second, will the steep rise in contributions by married women be postponed until after equal pay has been introduced? Finally, what will be the additional cost to industry of this increased contribution?

Mr. Ennals: It is clear that I ought to apologise to the House for making too long a statement. It was perhaps that I read it too slowly, because of the state of my voice, but in any case I apologise to the House.
Three points have been put to me. First, in relation to public service pensioners, there will now be detailed consultation between the responsible Government Departments and the staff interests so that their interests may be fully taken into consideration in reaching decisions on what sort of adjustments should be made in the light of the new scheme.
Second, we are removing the right of married women not to pay contributions only because we are bringing in benefits which are fully equal with those of men. This is consistent with the whole spirit of equal rights for women and of equal pay, with which my right hon. Friend is dealing.
I was also asked about the cost to industry. It is estimated that the increase in employers' contributions compared with the present level will increase labour costs by about ½ per cent. Our estimate is that this will have the effect of increasing the cost of living at that time by about the same amount.

Mr. R. C. Mitchell: Will there be retrospective preservation of occupational pensions in public sectors other than those mentioned by my hon. Friend?

Mr. Ennals: Yes, Sir. The ones I mentioned were those for which the Government have direct responsibility. In other parts of the public service—for instance, local government, police, the fire service, etc.—the main responsibility lies with the local authorities.
While the Government cannot, of course, give an undertaking, our expectation is that the local authorities will act as we will—as good employers. The objective as far as the teachers is concerned is already secured by existing arrangements. It is for the nationalised industries to decide the matter in relation to their own pension schemes, but I have every reason to expect that they will take a generous view of retrospection.

Sir B. Rhys Williams: Does the hon. Gentleman realise the incredulity and dismay that his announcement about the preservation of pension rights in occupational schemes will have caused among hon. Members on both sides and will cause in the country? Will he reconsider his attitude on this question?

Mr. Ennals: We would like to have introduced total retrospection, but it was


made abundantly clear to us by the representatives of the employers, especially by the C.B.I., that they would consider this to be retrospective form of action which would impose heavy financial burdens upon occupational pension schemes. It would have been difficult for us to proceed against their will in this matter, although we would like to have done so.

Mr. Pavitt: While welcoming the fact that the Government have recognised, through the constant attendance allowance, that disability goes beyond the person concerned, may I ask whether my hon. Friend is satisfied that they are being comprehensive enough and that the take-up is sufficient? Secondly, will my hon. Friend consider the possibility of somehow making the National Health Service contribution a clearly identified and separate part of national health insurance?

Mr. Ennals: We will consider the latter suggestion.
I agree that this new move on attendance allowance is a very important step forward. Adjudications will be made by an attendance allowances board, which will consist largely of people with medical qualifications. Our expectation is that about 50,000 very severely disabled people will qualify for allowances, of whom probably about 10,000 will be very severely disabled children.

Mr. Lawler: Will the hon. Gentleman clarify the proposals to reduce the supplementary benefit entitlement of men disqualified from employment benefit for certain reasons? Bearing in mind that disqualification begins as a result of allegations either from employers or, indeed, from staff employed by various Ministries, will he accept that it would be wrong, until such allegations are replied to by the defendant, to reduce his requirements by as much as one-third?

Mr. Ennals: There is, of course, a right of appeal for those who object to a decision which is taken, whether it relates to industrial misconduct or to the other categories to which this would apply. Were we not to make some change, and not make a reduction greater than 15s., it would give little support to

the national insurance unemployment benefit provisions. This change really had to be made and I am sure that hon. Members on both sides will think it quite a modest reduction. Where there are difficulties, the Supplementary Benefits Commission will be able to use its discretion.

Mr. Booth: Does the Minister's statement mean that the Government are proposing to remove the grade or class provisions and financial qualifications from Section 22 of the National Insurance Act, 1965? If so, this will be welcome in view of the grave anomalies created by those provisions. Will my hon. Friend look carefully at the interpretation put by the National Insurance Commissioners on the words:
… participating in … or directly interested …
with a view to removing all anomalies arising from this Section at one fell swoop?

Mr. Ennals: We certainly hope to remove anomalies, but it is difficult to find another definition of "directly interested". We will be removing the grade or class and financial qualifications.

Mr. Younger: Is the hon. Gentleman aware that his whole treatment of pension schemes in the Bill is causing personal distress to many people? Will he undertake that, during the course of the Bill's passage, he will look closely at good arguments put forward and make material alterations in favour of occupational pension schemes?

Mr. Ennals: There is personal distress only among those who have misunderstood the proposals or who have been misled. It is true that many people have been under the impression, because of what has been said by certain persons, that, somehow or other, occupational pension schemes are to be taken over, or that they will lose pension rights they have built up by their payments over the years, or that they will not be able to retire earlier or that they will lose their lump sums. Uncertainties have been unnecessarily created, but I think that there is now understanding that the Government have no such intentions in any of these respects.

QUESTION OF PRIVILEGE

Mr. John P. Mackintosh: On a point of order, Mr. Speaker. I seek your guidance on a possible breach of privilege.
I am sorry to take the time of the House and that I have not had time to give you prior notice. Nor have I been able to contact the two hon. Members mentioned in the report which I wish to submit to you.
There is in The Times today a report which suggests that an attempt has been made to serve a writ on an hon. Member inside the House on a sitting day.
I was under the impression that this was either a contempt of the House or a breach of privilege. I would be grateful for your ruling.

Mr. Speaker: The hon. Gentleman will bring me the newspaper and the Clerk will read to the House the paragraph of which complaint has been made.

Copy of newspaper handed in.

The CLERK OF THE HOUSE read the passage complained of:
Maxwell 'under blockade' from Pergamon"—
It seems that Pergamon has been trying without success to serve Mr. Maxwell with legal papers since last Friday. In a protest letter to Sir Henry d'Avigdor-Goldsmid, Mr. Maxwell claims that a representative of Pergamon attempted to serve legal papers on him at the House of Commons last Friday, after claiming to be one of his constituents.

Mr. Speaker: In accordance with usual practice, I will rule tomorrow on the matter.

INDUSTRIAL RELATIONS (IMPROVEMENT)

4.8 p.m.

Mr. David Mitchell: I beg to move,
That leave be given to bring in a Bill to improve industrial relations by setting out a Highway Code of good industrial relations practice, by reducing misunderstandings through ensuring that a limited company's workers are at least as well informed as its shareholders, by encouraging employers to modernise their grievance procedures and trade unions to modernise their own rules, by ensuring that new written agreements are binding on employers and trade unions unless both parties agree otherwise, by providing a civilised alternative procedure for resolving many disputes without the need to resort to strike action, by protecting the public from certain limited types of strike by withdrawing the blanket protection to call these particular strikes without risk of any penalty, and by other helpful measures.
I apologise to hon. Members for choosing a day when so many statements have taken up the time of the House already, but if anyone doubts the importance of my Bill I hope that he will look at the figures of industrial disputes.
Throughout the 1950s the average number of new strikes a week outside of the coal industry was 11. During the 1960s the average figures has risen to no less than 31. So far this year it is over 50 a week outside of the coal industry. In view of rocketing figures of this sort we realise how essential it is that legislation be introduced to deal with such a very serious problem.
The figures themselves, serious though they are, underestimate the real damage which is being done to industry, for the figures do not, and cannot, cover those who are unable to work because others are on strike so that they do not have the parts which they need, the equipment they should operate, and so on. It is, therefore, in the national interest that top priority should be given to legislation in this matter. Indeed, with great respect to the House and the First Secretary of State, I consider that legislation on industrial relations is more important than legislation on prices and incomes at this time.
The Government did promise legislation. The Prime Minister went so far as to say of his Bill last summer:
I have to tell you that the passage of the Bill is essential to the Government's continuance


in office. There can be no going back on that.
The country is tired of delay. The House is tired of delay. Those who are involved in industrial disputes are tired of delay. Therefore, I have come forward to help by introducing my Bill.
I recognise that one cannot legislate for good industrial relations. I do not pretend for a moment that we can, for industrial relations are about men and management, about foremen and shop stewards, and how they get on with one another. But what we can do is provide a framework within which they can make sensible bargains and stick to them afterwards. That is one of the primary objectives of the Bill.
The Bill is not an attack on responsible trade unionists. But it will be an attack on agitators and irresponsible elements. It will encourage trade unions to modernise their own rules. There will be a registrar to see that rules are fair, just and democratic. If anyone doubts the need for this, let him consider that no fewer than 50 unions have a system of appeal against disciplinary penalties, with appeals being heard by the same body which imposed the original penalty. I seek to raise the standard of the stragglers to that of the best in British trade unionism.
The Bill will ensure that new written agreements are binding upon employer and trade union unless both parties agree otherwise. Enormous advantages will flow from that to the trade unions, the employers, and the country. It will mean that one of Donovan's prime aims, to see an improvement in the content of agreements, will be reached, for once people are negotiating a binding agreement they will be much more careful about the content of the agreement which they are making. There will be less uncertainty and less misunderstanding—those two major causes of industrial dispute.
Another advantage will be an improvement in communications, for once a trade union or an employers' association is making a binding agreement it will make sure that its own members realise what they are being committed to.
Next, it will enable trade unions to sue for damages if an employer breaks an agreement. Hon. Members on both sides will have noted that one of the most serious problems facing Londoners today is the dispute on the Northern Line. In

that dispute, the trade union concerned maintains that the employer has broken an agreement. If that be so, my Bill will provide the opportunity of redress for the men concerned without their having to go on strike. That in itself will be recognised by those unfortunates who have to travel on the Northern Line as an enormous step forward.
Next it will make the unions use their best endeavours to see that an agreement is stuck to, once made. Too often, trade union officials use unofficial disputes as a means of negotiating, as a means of putting pressure on an employer. My Bill will ensure that the trade union will come off the fence and will make clear to its members where it stands as a party to the agreement which has been entered into.
I draw attention to one other enormous advantage. My proposals will provide a civilised alternative procedure for resolving many disputes without the need to resort to strike action. In the short time available to me, I give just one example. Thirty per cent. of the cases in which the Department of Employment and Productivity is asked to intervene involve questions of recognition. The time has come when it should not be the Minister, the Commission on Industrial Relations, a public inquiry or the employer which should decide the union to represent the men where there is a dispute about recognition in a factory or plant. The decision should be taken by the men on the factory floor. That will be industrial democracy at work. Take the ballot box into the factory; let the men decide for themselves. By machinery of that kind, we shall create an opportunity for finding a peaceful solution to one of the major causes of industrial dispute today.
I do not pretend that my Bill will be a panacea to resolve all industrial disputes. But it will start the first step on a road which is essential if we are to deal with the spreading industrial chaos which is doing so much damage to Britain today.

4.16 p.m.

Mr. Stanley Orme: I oppose the Motion. We are grateful to the hon. Gentleman the Member for Basingstoke (Mr. David Mitchell), on a day such as this, for at least uniting the


Labour Party in opposition to his proposals, but we are not prepared to accept his concoction from "Fair Deal at Work", which in so many ways runs directly counter to the Donovan proposals and other sensible proposals for improving industrial relations.
I do not wish to delay the House—we have an important debate ahead—but I could not let the matter pass without saying that we are totally opposed to the hon. Gentleman's proposals. We voted them down last time. We could, if we wished, vote this Motion down now, but, in the circumstances, I wish merely, on behalf of my hon. Friends, to put on record our complete opposition to the proposals which the hon. Gentleman has made.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and agreed to.

Bill ordered to be brought in by Mr. David Mitchell, Mr. John Page, Mr. Nicholas Scott, Mr. David Howell, Mr. George Younger, Mr. Patrick McNair-Wilson, Mr. Edward M. Taylor, Mr. Keith Speed, Sir Tatton Brinton, Mr. Kenneth Lewis, Sir William Robson-Brown, and Mr. John Astor.

INDUSTRIAL RELATIONS (IMPROVEMENT)

Bill to improve industrial relations by setting out a Highway Code of good industrial relations practice, by reducing misunderstandings through ensuring that a limited company's workers are at least as well informed as its shareholders, by encouraging employers to modernise their grievance procedures and trade unions to modernise their own rules, by ensuring that new written agreements are binding on employers and trade unions unless both parties agree otherwise, by providng a civilised alternative procedure for resolving many disputes without the need to resort to strike action, by protecting the public from certain limited types of strike by withdrawing the blanket protection to call these particular strikes without risk of any penalty, and by other helpful measures, presented accordingly and read the First time; to be read a Second time upon Friday 30th January 1970, and to be printed. [Bill 66.]

PRICES AND INCOMES

4.20 p.m.

The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): I beg to move,
That the Prices and Incomes Act, 1966 (Continuation of Part II) Order 1969, a draft of which was laid before this House on 8th December, be approved.
What we are discussing this afternoon is the problem of inflation and the part which can be played in solving it by a prices and incomes policy. Of course, a prices and incomes policy is not, and cannot be, the whole of any Government's economic strategy—or of its strategy for social justice. The challenge facing us is that all the alternative forms of demand management that have been tried out by various Governments at various times have never yet succeeded in curbing inflation without curbing growth. They have often been savagely socially unjust, too.
It is for this reason that Governments in all advanced industrial countries keep returning to this problem, trying to find a solution. In discussing inflation we are not discussing a problem peculiar to a Labour Government. I have very good authority for saying that. I have the authority of no less a person than the former Conservative Chancellor the right hon. Member for Barnet (Mr. Maudling), who only a few days ago unburdened his soul on this theme in the Sunday Express of 30th November. He wrote:
Every Government since the war has been haunted by the fear of inflation. No Chancellor has been able to find a final answer. Mr. Rising Price may occasionally be halted, but he is never stopped.
We are discussing inflation in this context for two reasons. The first is because inflation hits hardest the people who have least protection against it, the pensioner who depends on the generosity of taxpayers to keep alive, and the low-paid worker who can never exert enough bargaining power to keep himself abreast of the unsatisfied demands of an affluent society. Secondly, it is because inflation, if it gets out of hand, is the enemy of economic growth. Successive Governments on both sides of the House have learned this lesson to their cost.
It is these harsh economic facts that gave birth to the concept of a prices and


incomes policy. Hon. Gentlemen opposite now find it politically convenient to sneer at it, but they had an incomes policy—only It was an incomes policy, not a productivity, prices and incomes policy. As such it was so patently unfair that it never got off the ground. It was a crude, clumsy attempt to check demand by clamping down unilateral restraints on the wage earner, particularly, incidentally, the wage earner in the public service.
It was left to this Government, as a Socialist Government, to broaden the concept into something which did not do violence of every concept of human justice. Our concept was embodied in the Declaration of Intent of December, 1964, of which my right hon. Friend the Member for Belper (Mr. George Brown) was the architect. To those of my hon. Friends who have had reason to quarrel with him about some aspects of foreign policy, I would say that none of us could deny that in economic policy he has been consistently an expansionist.
It is his concept which imbues the whole content and tone of the White Paper which we are discussing as a background to this order. What is this concept? First, it is that if we are to secure steady and sustained growth we must find ways of breaking the hitherto almost automatic link between expansion and inflation. We must find ways of giving the go-ahead to higher productivity without at the same time giving the go-ahead to higher prices, which follow inevitably if increases we pay out to ourselves exceed what we produce.
Secondly, it is a concept of social justice. We have not got a true prices and incomes policy if it is one that ensures that certain people who do not command the key positions of economic power get left behind.
In short, it is a very difficult concept indeed to get across to people who have been conditioned by the "catch as catch can" philosophy of a materialist society. My right hon. Friend the Member for Belper was the first to recognise this. That is why he realised it was a great triumph to get the concept accepted in principle by both sides of industry. What we are discussing is the history of the application of that concept in practice and where we should seek to go from here. It is all set out in the White Paper very frankly and honestly.
We explain that because of the emergency situation which we inherited, the failure of the previous Conservative Government to solve the problem of inflation and the effect of that on our balance of payments, we had, as it were, to brutalise the policy—use it in stringent forms for short-term situations instead of being able to develop it gradually as a longterm policy. The result was that it has been effective for these short-term purposes, but only for short-term periods. The starting point of this afternoon's debate is how we can adapt it for its long-term rôle and at what pace.
No doubt voices will be heard at this stage saying "Why bother? Why not scrap the whole idea?" I am sure that hon. Gentlemen opposite will take that line. It is fashionable at the moment to argue, "The prices and incomes policy has failed. Look around, it is obviously in ruins". No doubt we may have an intervention from my hon. Friend the Member for Middlesbrough, West (Dr. Bray) quoting Professor Lipsey at us again, as he did in the columns of The Times, trying to prove that a prices and incomes policy has been inflationary. My Department has analysed Professor Lipsey's argument very thoroughly and we reject both his methodology and his conclusions. No doubt the Chancellor may have some remarks to make about that later.
My answer about this kind of accusation is that even if the policy were in ruins we should have to build it up again. We are not attending today the demise of a grand design, but the beginning of a long process of educating people in the use of a new economic weapon which can help them to control their own economic environment. As the White Paper puts it, we are seeking to
widen the area of democratic choice".
The first thing that hon. Gentlemen opposite would do if they were returned to power, and I hope that we will have this very much in mind as we listen to the arguments and attacks of right hon. and hon. Gentlemen opposite, would be to introduce an incomes policy in one of the various bastard forms that we have had offered to us by the right hon. Member for Bexley (Mr. Heath), the right hon. Member for Barnet and the right hon. Member for Mitcham (Mr. R. Carr). I


shall be happy to give details to the House later.
It would be an incomes policy which would fail again, because in none of its forms would it be a prices and incomes policy. Our policy is not in ruins. The 1968 Act has succeeded in the limited task it set itself to achieve—to prevent erosion of the advantages of devaluation by a dangerous rise in unit costs at a crucial turning point in the country's economic situation. Here again, we set the policy an almost superhuman task. We had production expanding after devaluation, giving us a 4 per cent. rise in growth in 1968, with all the extra demands for labour that it has entailed; the strengthening of the bargaining power of unions; import prices rising; and we had a tough Budget to force more of our resources into the export field.
In such a situation we could easily have had a wages spiral that could have forced up unit costs and robbed us of the whole purposes which devaluation was designed to achieve. Instead, as the White Paper shows, the situation was contained with remarkable success. The picture given in the White Paper has been reinforced by the Treasury's latest monthly assessment of the economic situation—the usual sober Treasury document. This points out that in terms of dollars unit labour costs had risen, up to the second quarter of this year, much less than those of our competitors. The bulletin concludes:
A broad comparison of the movement of unit labour costs in manufacturing in the United Kingdom with that among major competitive countries overseas suggests that in the autumn of this year much of the relative cost advantage conferred by devaluation remained.
Is that a policy in ruins, or a policy vindicated, particularly when, as the Treasury assessment points out, rising earnings have been offset by rising productivity, another of the major aims of the policy? Even the right hon. Member for Mitcham was forced in our debates in March, 1968, to admit:
Some of the work of the Board has had valuable results in promoting sensible productivity bargaining …".—[OFFICIAL REPORT, 21st March, 1968; Vol. 761, c. 645.]
That was only at the beginning of the breakthrough in making industry more

productivity-conscious than ever before. Even my hon. Friends who were the bitterest critics of the 1968 Act admit, I believe, that this new productivity consciousness is one of the most important gains from the policy.
But a policy as stringent as that, backed by such stringent powers, brought severe stresses and strains, just as did the stringent economic strategy of the Government in the post-devaluation period of which the 1968 Act was only a part. When we talk about the stresses and strains caused by a prices and incomes policy, by the stringent statutory powers of the 1968 version, let us remember that stresses and strains were endemic in the very economic situation with which the Government were having to deal and would have been there in any case.
I frankly admit, however, that the stringent use also brought unfairness. It is no part of my case this afternoon to claim that the 1968 prices and incomes policy has worked perfectly and has done exact justice or achieved everything that a prices and incomes policy ought to achieve. It brought unfairness and not least to many employees in the public services.
Hon. Gentlemen opposite who are now arguing and will be arguing during the debate that the prices and incomes policy has broken down will be arguing, as they have done elsewhere, that it broke down first and foremost in the public sector because there was excessive Government leniency to their own employees, or the employees of the public services generally. This is all of a piece with their concept of an incomes policy, one in which the Government clamp down hard on the people under their own control while leaving everyone else to exploit a free-for-all.
But the facts are different. The facts are that many employees in the public service have seen others in private industry get big increases through productivity bargains, or just sheer wages drift, advantages which they have not been able to enjoy. That is why there has been unrest in the public sector. It was because the Government realised that a stringent policy must inevitably bring stresses and strains that they knew it was appropriate only to a stringent economic situation.
That is why, when the 1968 legislation was before Parliament, we agreed to limit


its duration to the end of this year. That is why we told my hon. Friends at that time that we hoped that it would be possible to allow the powers to lapse. In fulfilment of that promise the Chancellor announced in his Budget speech that the powers would be allowed to lapse at the end of 1969. Such powers, he said, were
… viable only in exceptional circumstances and then as a short-term measure."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1004.]
My right hon. Friend added that since the threatened prices-wage spiral following devaluation had not occurred it would be possible to move to much more moderate Part II powers at the end of this year.
Since that time our economic recovery has strengthened steadily and the Government have been able to look further ahead to the future with greater confidence and work out the basis of an enduring long-term policy. The instrument of the long-term policy will, in due course, be the new Commission for Manpower and Industry with terms of reference and powers appropriate to a long-term policy. I shall shortly begin consultations with both sides of industry on the constitution of that new body, its terms of reference and its powers. I assure my hon. Friends that the Government will press ahead with the maximum possible speed to put that legislation before the House.

Mr. Norman Atkinson: When does my right hon. Friend expect this new Commission to be set up? What time of year will it come into operation?

Mrs. Castle: It is genuinely impossible to give my hon. Friend a date, because, as I have just told the House, I am immediately to start consultations with both sides of industry. I have to listen to the representations of both sides of industry, no doubt modify details of the proposed legislation, and then put the Bill before the House. No doubt hon. Gentlemen opposite will delay it as much as possible. Until the legislation is passed we cannot have an appointed day. But I can assure my hon. Friend that this, as he knows, is part of the legislation that we shall get through this Session, I am sure with the full help and backing of my hon. Friends. In anticipation of that legislation we say, in paragraph 33 of the White Paper:

The Government hopes that it will not be necessary to perpetuate these delaying powers in the legislation to set up the C.I.M.
I know that some of my hon. Friends are worried by the word "hope"—and I have just heard it repeated. They wonder exactly what it means. I can assure my hon. Friends that such a word is necessary until consultations are complete. But it is the Government's belief that perpetuation of such delaying powers will not be desirable or necessary in the legislation for the C.I.M. Therefore, in this situation the reactivation of Part II powers is, as the Prime Minister told the House during the debate on the Queen's Speech, a "bridging operation".
These powers are needed because, as we are systematically de-escalating our statutory control, it is essential not to escalate the national mood of expansionist euphoria too sharply and prematurely [Interruption.] I am sure that the House will listen with interest to serious contributions from hon. Members. If that happened, in the next few vital months there could be a wages and prices explosion in which those in a strong bargaining position on either side of industry would pre-empt all the fruits of our economic recovery, leaving nothing for the special needs of the low-paid, for lightening the tax burden, or improving the social services which form such a vital part of the standard of living of the very workers whose interests we are discussing.
Of course, hon. Members opposite will vote against these powers, because they do not believe in a prices policy anyhow. Let me remind hon. Members, my hon. Friends in particular, exactly what powers will be available to the Government if the order is passed tonight. Part II of the 1966 Act, which can be activated only by order, has two main aims. First, it enables the Government to require the early warning to Government Departments of proposals to increase pay or prices. An early warning mechanism is essential if the Government are to have any influence at all over price increases or pay settlements and it has formed a very important part of the operation of the policy.
As long as these powers have been there under the 1966 Act, industry has co-operated very fully on a voluntary


basis, so fully that it has never been necessary to make an order requiring a statutory notification of pay or price increases. But I have no doubt that if these powers were not there, if Part II today were not to be reactivated, the situation would dramatically change. [HON. MEMBERS: "It would be the same as now."] No, it would not be the same as it is now, because we should not have an early warning system and we should not have early warning powers. [Laughter.] Hon. Members opposite, who do not give a damn about price increases, laugh, but those who are informed about these matters know the far-reaching coverage of the early warning system and what it has meant in modifications or actual rejections of price increases.
For instance, voluntary early warning arrangements cover about 50 per cent. in value of all food and drink. In addition, more than 40 per cent. of foodstuffs are subject to a constant watch by the Ministry of Agriculture, which means that its officials keep the prices of basic foodstuffs, or other foodstuffs which do not lend themselves to the early warning notifications, under constant review. In every case, the arrangements cover the vast bulk of the United Kingdom production of the commodity concerned. When a proposed price increase is notified, it is examined exhaustively in the Ministry of Agriculture and the firm concerned gives the Department complete information about its costs and sales.
Since this information and the discussions at this stage of the prices policy are obviously strictly confidential, much of the success of the Government in influencing prices cannot be spelt out. This has been one of the basic difficulties we have had to face in working with the policy, but it does not mean that the effect on prices has not been very steady and systematic. Indeed, we report the fruits of this action in paragraph 30 of the White Paper when we point out that between March, 1968, and November, 1969, about 18 per cent. of the price increases notified to the Department—and this is only at the stage of notification—were modified or withdrawn after discussion with the Government Departments concerned, therefore not going any further along the prices and incomes chain of control.

Mr. Brian Walden: We are all listening with the greatest attention to my right hon. Friend's informative speech. She has been very courteous in giving way to me. She is now dealing with what for me is a fundamental. She keeps saying that a dramatic effect would take place if Part II were not reactivated with its prices control. I have asked her before, and I now ask again, what will be the case, on her argument, when the bridging arrangements cease.

Mrs. Castle: I am in this very difficult situation. [Laughter.] We on this side of the House will have a serious discussion and ignore hon. Members opposite. I am in the difficulty that at this stage I cannot tell my hon. Friend or the House what will be the exact powers of the new Commission and I therefore cannot help him as I should like. I must ask him—I was about to say "to take me on trust", but perhaps that is too much—at any rate, to accept from me that I am here in a genuine difficulty.
However, I think that my hon. Friend would be the first to realise that, for the reasons I have stated, the next few months are particularly crucial and there is no doubt that if the order is not passed tonight, the collapse of these arrangements is inevitable and inevitable at a moment when the Minister of Agriculture, for instance, will be dealing with a specially heavy load of notifications of price increases, as many food manufacturers like to make their price changes early in the new year. I do not suppose that hon. Members opposite would mind if these arrangements collapsed, but I think that it is a different consideration for my hon. Friends.
But if the order is passed, I give this guarantee to the House, that the arrangements will continue in full effectiveness. I want to give this guarantee because I understand that there has been some concern arising from stories which have appeared that in Appendix 2 of the White Paper there was a list of items coming under the early warning procedure which was withdrawn as a result of my discussions with the C.B.I. This is an important point and I should like to explain.
In our consultations, the C.B.I. said two things. It said that from its point of view this was not an incomes policy,


but a prices policy. It used in support of that the argument that at the end of the three months' standstill and review there was nothing to prevent a wages settlement from being exercised retrospectively.

Mr. Kenneth Lewis: On a point of order. Will you ask the right hon. Lady to address the House, Mr. Deputy Speaker, and especially hon. Members on this side? We are as concerned in this debate as are her hon. Friends below the Gangway whom she is trying to impress to go into the Lobby tonight.

Mr. Deputy Speaker (Mr. Sydney Irving): All hon. and right hon. Members must address the Chair direct.

Mrs. Castle: I am addressing you, Mr. Deputy Speaker, and that I shall always do.
I was saying that the C.B.I. made these two points. First, it felt that it was a prices policy and not an incomes policy, because price increases, once forgone, could not be recouped retrospectively, unlike pay settlements. Secondly, it expressed anxiety about the inclusion in what it regarded, and I am presenting it to the House as this, as a White Paper setting out a long-term policy—and certainly it emphasises the long-term approach in the criteria and in other respects, although not in the powers—an early warning list in detail which seemed to the C.B.I. to prejudge what might come out of the discussions about the future of the new C.I.M.
After consideration, we withdrew the list in view of this anxiety, but we told the C.B.I. that only minor modifications in that early warning list could be made at this stage of the policy, and we have said that clearly in the White Paper.
The Act allows a Department up to 30 days to satisfy itself that a pay or price increase is justified, to negotiate modifications, or to refer a proposal to the P.I.B. for more thorough examination. As the House knows, if the Government decide that an examination by the N.B.P.I. is necessary, we shall be able, under the Part II powers, to hold up the pay settlement or price increase for three months, pending the board's report, thus enabling the reasoning of the board's report to be brought to bear on the negotiators, in an attempt to influence the

price proposal or the pay settlement. But, at the end of the three months, no further delaying power is available to the Government.

Sir Edward Brown: If there is a violation during this three-month period, will the right hon. Lady use the sanctions laid down in Part II of the Act?

Mrs. Castle: Of course, the Government will have to consider what action it considers necessary to take under the powers. This is obviously one reason for this arrangement.

Sir Edward Boyle: Is the right hon. Lady aware that her answer to the hon. Member for Birmingham, All Saints (Mr. Walden) must strike an unprejudiced listener as absolutely ineffectual? If the reactivation of these powers could have some significant effect on prices and wages during the bridging period, how can she now say, before the discussions with the C.B.I., on her own evidence, have even begun, that it is sensible to give up these powers at the end?

Mrs. Castle: For the reasons which I have spent a considerable amount of time in putting to the House. I am sorry if the right hon. Gentleman does not find them convincing. They are totally convincing to the Government. If they were not, the Government would hardly be putting this proposition to the House tonight, with all the controversy that it entails.
To the Government, it is a totally convincing fact that, if, at the end, we move from the present situation into a situation of no powers at all, no early warning, no notification of price increases and pay settlements, no power for the N.B.P.I. to look at them at a moment when it could influence them, the psychological danger would be that there could be very serious inflationary consequences.
We are saying, yes, we want to move to an educational policy; yes, we want to move to the longer term and a voluntary policy. But, if we are de-escalating stringent powers, the speed at which it is done and the timing of it can be the essence of the whole argument.

Mr. Joel Barnett: If my right hon. Friend is arguing that the longer-term policy is an


educational policy, as she says in paragraph 6 of the White Paper, and if she believes in this longer term prices and incomes policy, why cannot she be more specific about the word "hope" in paragraph 33? If she believes in the longer-term economic policy without compulsory powers, why cannot she specifically say, whatever may result from the consultations, that she does not believe that they will be necessary?

Mrs. Castle: I could not have put it more categorically at this stage, when we are going into consultations. I cannot put it more categorically than to say that the Government believe that the perpetuation of such delaying powers will be neither desirable nor necessary. I am about to go into negotiations, and I must trust that this will satisfy my hon. Friends.
The overwhelming emphasis is on the word "influence" giving the N.B.P.I. a chance to influence a price proposal or a pay settlement. These powers are appropriate and are needed as we move to a policy in which we stress the educational rôle. An educational policy does not consist just of generalised admonition. It consists, as is stated in paragraph 10 of the White Paper, of changing "old institutions and long-established attitudes". It consists of accepting the principle that all those who exercise market power should be accountable to the community for their actions.
I know that what concerns my hon. Friends is the spirit in which these delaying powers over pay settlements will be administered, and I hope that the House will forgive me if I spend a few moments on that. They will be administered in a spirit not so much of imposing solutions as of offering choices to those who are concerned. The central challenge we make in the White Paper is this: if output per worker increases by 3 per cent., most pay settlements need to fall within a range of 2½ per cent. to 4½ per cent. if the aim of greater price stability is to be achieved. Is there anyone in the House who contests this?
We say "most pay settlements" because in the new White Paper, as in the last, we accept that some settlements must come above the normal range if

the purposes of the policy are to be fulfilled. We must provide a continuing stimulus for productivity bargaining, and here, as with the other criteria, we have learned from our experience in operating the policy, and we make adaptations in the old criteria and spell out the new and more sophisticated concept of continuing efficiency bargaining rather than once-for-all productivity bargaining. This is a new concept which can and must embrace non-manual as well as manual workers.
Secondly, we make provision for the fact that our planned progress towards equal pay will mean that, in those firms employing a high proportion of women at much lower rates than men, pay settlements may be necessary for these women above the normal range.
It has always been possible to give the low-paid workers increases above the ceiling under the current policy, provided that the increase as a whole for their industry or firm did not exceed the ceiling of 3½ per cent. But this did not enable us to deal as sympathetically as we wanted with those industries where the general level of pay is low, as the N.B.P.I. found in January this year when dealing with farm workers. We found great difficulties under the criteria of the policy, so we have rectified that. The White Paper offers a new deal for the low-paid worker, provided that the higher-paid workers do not use the higher-than-average increases for the low-paid as a justification for demanding similar increases for themselves.
We accept that in those industries where the general pay level is low we can achieve a radical improvement of the position of the low-paid only by settlements above the normal range, and we spell out some examples in the White Paper—agriculture, catering, retail distribution. I see that Mr. Alf Allen, the General Secretary of U.S.D.A.W., has rushed to condemn the White Paper and has said that he will not accept 4½ per cent. for his low-paid workers. I say to him, "Read the White Paper, Alf, before you throw away the best chance you have ever been offered of helping the people in your union."
We do not intend to leave this problem to the hit-and-miss of a free-for-all collective bargaining. We believe that the problem of low pay can be tackled


only by a joint Government-union-employer initiative. We need to know more about the incidence of low pay and its causes. We need to help them to raise their earnings by raising their productivity, and my Manpower and Productivity Service will play an active rôle in seeing that the proposals of the N.B.P.I. are followed up.

Mr. Keith Speed: Mr. Keith Speed (Meriden) rose—

Mrs. Castle: I am sorry, I cannot give way. I always get so many interruptions, and I do not want to take up too much of the time of the House. There will be time to ask questions which the Chancellor of the Exchequer will be able to answer in his winding-up speech.
We need to use the N.B.P.I. and, later, the new Commission to make investigations in depth into cases where low pay is a major problem and to suggest the means by which we can make progress case by case and industry by industry. The words in paragraph 69 of the White Paper are not just empty words, designed to lure my hon. Friends into the Lobby tonight. I have already acted on them. I have drawn up a list of possible references covering sizeable groups which, on the evidence of our new earnings survey, appear to contain a relatively high proportion of low-paid workers.
The list which I have drawn up covers cases in the public as well as the private sector and those whose pay is determined by wages councils as well as by voluntary agreements. I have already written to the T.U.C. and the C.B.I. with these suggestions and I hope that the first references for these investigations in depth can be made with the minimum of delay.
Finally, there are the public services. Once again, we reiterate in the White Paper our belief that public employees are entitled to the same treatment as workers in private industry. Of course, there must be the same emphasis on efficiency, but, equally, there must be fairness. To achieve fairness, we need to give more weight than we have done in the past to comparison with outside industry, comparison with particular jobs where this is appropriate or more generalised comparisons where there are no exact counterparts in private employment. This, too, is a new deal for the public services.
What a different policy this is from that of right hon. and hon. Members opposite. I repeat that, of course, the Opposition believe in an incomes policy. The Leader of the Opposition announced his policy in last year's Budget debate, when he said:
I am quite prepared for a tough incomes policy to ensure that costs do not outrun productivity, but it must be achieved by using all the aspects of economic policy in a complete economic context.

An Hon. Member: What did that mean?

Mrs. Castle: Yes, what did the right hon. Gentleman mean? He went on to elaborate what he meant by "a complete economic context". It was—guess it—No. 1, cuts in public expenditure. No. 2 —guess it—reform of trade union law. Thirdly, tariff reductions, and fourthly, dealing with monopoly situations.
That is all rather vague stuff, but on one thing the right hon. Gentleman was emphatically precise. I quote:
Above all, the Government have the responsibility to ensure that the vast public sector which is now under their control does not grant wages which are more than productivity will justify. It is for the Government to stand up on this matter and take the action which is necessary in their own Sector."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 307–8.]
Incidentally, the right hon. Gentleman made no mention whatever of a prices policy which is, perhaps, not surprising in view of his party's commitment to put up food prices by changing agricultural policy and to have wide, across-the-board taxes on consumption through a value-added tax.
Then there was the right hon. Member for Barnet in the article in the Sunday Express, to which I have already referred. He, too, talked about a threatened wages explosion and the need for an incomes policy. He argued that inflation could not be cured by increased taxation, nor could a credit squeeze solve it without
a dramatic and unacceptable upsurge in unemployment and severe long-term damage to our economy.
That is fine.
What, then, is the right hon. Gentleman's remedy? He spelled it out thus:
What, then,"—


he asked—
can the Government do? It can take a firm line with its own employees, and instruct nationalised industries to do the same.
Once again, there was no mention of a prices policy. Once again, the only immediate and positive step is to hold down pay in the public services, and For the rest of workers the right hon. Gentleman's remedy is spelled out in the article: to curb the power of the trade unions. These are the policies in which the Opposition believe, and that is why they will be voting against the order tonight.
We know the reasons why the Opposition will be voting against the order. I call on my right hon. and hon. Friends to repudiate those policies of the Opposition. My right hon. and hon. Friends are asked tonight to vote for two things. The first is the principles of a productivity, prices and incomes policy on the lines I have outlined. The second is the transitional powers to enable us to pass smoothly to a long-term voluntary policy without losing the momentum of those most valuable educational lessons that we have begun to hammer home.
As we pass smoothly, I am convinced that we shall have with us not only the vast majority of workers, but the trade union movement—

Mr. Stanley Orme: That is not true.

Mrs. Castle: I say that in full knowledge of the Press statement on my White Paper issued by the General Council of the T.U.C. Indeed, I base my case on that Press statement. It is true that it made sweeping attacks on the decision to reactivate Part II powers—yes, of course it did.

Mr. Orme: That is what it is about.

Mrs. Castle: Perhaps my hon. Friends will listen to me, because I believe that I have an important point.
I believe that it is the last paragraph of that draft statement which is most significant part of all. It reads:
The General Council would welcome a longer-term approach that provides a radically different framework from the one into which the Government has hitherto forced an essentially restrictive incomes policy. If this is in fact the Government's intention, it can

count on the co-operation of the trade union movement.

Mr. John Mendelson: Will my right hon. Friend give way?

Mrs. Castle: No.

Hon. Members: Give way.

Mrs. Castle: No, I am sorry. My hon. Friend will be able to speak later. I am just coming to the end of my remarks.
It is because it is the Government's intention to move steadily towards that longer-term policy—indeed, have already taken steps along that road—that I confidently call upon my colleagues to vote in the Lobby with me tonight.

5.7 p.m.

Mr. Edward Heath: In her many years in the House, the right hon. Lady the First Secretary has enjoyed considerable popularity and, indeed, from all parts of the House, a great degree of admiration. She has shown great ability and a large amount of courage. I assure her that in the House this afternoon, in all parts, she has our sincere sympathy. She finds herself in an impossible position and I know that she would like to admit it.
It is almost callous of the House to continue with this debate after the right hon. Lady's speech. It would really—[HON. MEMBERS: "No."] Yes, it is callous of the House. [HON. MEMBERS: "Then sit down."] It is obvious that in the educational work to which the right hon. Lady has devoted a considerable amount of her speech, she has a long way to go with her hon. Friends below the Gangway to make any progress at all.
It would be more courteous to the right hon. Lady—because it is obvious that the order does not have a friend in the House, even among many of her colleagues on the Government Front Bench; there are precious few friends—if we abandoned this debate, had a free vote and went out and buried the whole thing once and for all. That cannot happen, however, and so we carry on with this latest series of wrangles, which have been going on since the summer of 1966, in which the Government have shown an obsession with their own particular form of compulsory incomes policy, an obsession which has been with us—I think that both the Chancellor of the Exchequer and


his predecessor would agree—at the expense of a great deal of consideration of the rest of economic policy.
The right hon. Lady was kind enough to quote from my speech about general economic policy. I do not question her doing that. I was delighted to hear how well it read still after this time and I found nothing there with which I wish to disagree in the least. Not at all. Nor did I hear that quotation received with derision below the Gangway or above the Gangway—not in the least.
The right hon. Lady made two points I just touch on. She mentioned agricultural prices. She talked a great deal, as has the Chancellor of the Exchequer, about changes in prices without discussing the concomitant changes in social services which they make possible, or, indeed, the impact on the balance of payments as mentioned in the Report of the N.E.D.C. set up by the Government themselves. Nor did she face up to the fact of what will happen when the Government go into Europe, which is their present commitment, when increases in agricultural prices be three or four times as much as any changes in British agricultural prices alone.
She also mentioned the value-added tax. Perhaps the Chancellor of the Exchequer would like to give an undertaking when he winds up tonight, that the Government do not have in mind the introduction of anything in the way of an effective value-added tax. Is the Chancellor of the Exchequer prepared to say that this will be the breaking point on going into Europe? The Prime Minister said that there are advantages to be got from going into Europe. Will the Chancellor of the Exchequer say what advantages are available from a value-added tax which on going into Europe which would not be available to this country in its own fiscal system.
These are points which have got to be taken seriously by the right hon. Lady and not just thrown away in passing at the end of a speech, as she did.
Let me state our attitude to this order. It is now exactly the same as it has been since the Government first introduced the legislation in 1966. We are opposed to the system of compulsion in this order. We voted against it in 1966. We said then that it would lead to State

control of prices, wages and dividends. We are proved absolutely right. It was against everything which the Prime Minister himself said in the General Election in 1966, everything he said on the B.B.C.'s forum in which he pledged himself not to do it. Since then we have voted against it. Of course, there are many hon. and right hon. Gentlemen here who, if given the opportunity, would gladly vote against it with us tonight. Of course it led to further compulsion. Part IV of the 1966 Bill was injected in Committee upstairs without the principle ever having been discussed on the Floor of the House. What has happened is that over the years this has proved unacceptable to a free society, and the Government have been progressively forced to abandon these powers of compulsion.
At the same time they claim that their policy has been a success. The hon. Member for Bosworth (Mr. Wyatt), whom I do not see in his place at the moment, but who lets his views be known in other ways, has a point, that if it has been as successful as they make it out to be, why on earth are they abandoning it now? It may be that some hon. and right hon. Gentlemen opposite would like to keep it still. I do not know whether the Chancellor of the Exchequer in his heart of hearts would like to keep it, whether he regards it as having been effective. There are, of course, doubts about how successful it has been. In the White Paper the recent increases in the public services are justified on the basis—the excuse, almost—that they too be made to equal what had been done in the private sector of the economy. The Government realise what has been the criticism about the public sector. The right hon. Lady talked of the new wage spirals without putting the blame for them on the public sector, and it could not be placed on the private sector if the control had been as successful as the Government claim their legislation has been. There again, we get another contradiction in this oversimplified White Paper.
No, they have not been forced to abandon the policy by its success. There is in fact only a very weak, crude effort to justify this in the White Paper itself. They have been forced to abandon the policy because in fact it is unacceptable, and it has done more harm than good.
I was interested when the right hon. Lady said that the Chancellor of the Exchequer would be dealing in more detail tonight with the analysis which has been presented to the Treasury and other Government Departments by the two economists, because surely if he looks at the bottom of page 6 and the table in paragraph 7 he will see it is in the simplest, crudest form which really does not justify the description of economic analysis. It takes no acount of any factors of any kind in the economy, internal or external, whatever, but merely makes a crude statement that this shows the policy has been successful.
In fact this White Paper, like its predecessors on this subject, is a combination of the obvious and the superficial, and this one is a mixture of political claptrap as well. Let me quote just one sentence from paragraph 6:
In the consumer boom period up to October 1964 everyone had been encouraged to take rising living standards for granted regardless of whether they had been earned by higher productivity and exports.
That is a political judgment and has no relation to economics whatever. It is part of the wonderful world inhabited by the Prime Minister and the right hon. Gentleman the Member for Belper (Mr. George Brown) alone, a wonderful world which began on 15th October, 1964. What on earth does the right hon. Lady, who is responsible for this White Paper, or the Prime Minister himself, think the leaders of the T.U.C. were arguing about all through 1963 and 1964, and obstructing the efforts of my right hon. Friend the Member for Barnet (Mr. Maudling) if it was not precisely about this point—[Interruption.] It was. Yes, with the connivance of the right hon. Gentleman also—if it was not dealing with this whole problem of the relationship between income, prices, dividends and productivity?
I say this seriously to the right hon. Lady. It is time that the White Papers were restored to that degree of accuracy and integrity which in this country we formerly had from such documents.
Now the right hon. Lady casually and very easily dismisses the investigation which has been done by Professor Lipsey and Professor Parkin. We shall be interested to hear what the Chancellor of

the Exchequer has to say about it. After his right hon. Friend introduced it in the Queen's Speech one would have thought that in fact if they were to dismiss it there would have been published an analysis for general consideration. It is well known that it has been widely circulated.
The conclusions are extremely interesting. I think I can summarise them fairly by saying that we have a situation in which the incomes policy which the Government have been following since 1966 has had a damaging effect and not a helpful one in achieving their objectives. It is particularly the case when unemployment is above the figure of 1·8 per cent., but when it is below 1·8 it can have a helpful effect on restraining incomes. Now the Chancellor of the Exchequer may take to pieces the methodology of the conclusions, but what it is really doing in statistical form is emphasising what has been said in this House by my right hon. Friend the Member for Mitcham (Mr. R. Carr) and by hon. Gentlemen below the Gangway, and that is, that to operate the policy in this form has certain consequences, namely, that it sours industrial relations, and increases trade union aggressiveness in trade relations, and leads to the election of more extreme union officers, and the result is that wages are pushed up further than they would otherwise have been, and these are the problems and consequences of compulsion which will remain for this country, in my belief, for many years to come.

The Chancellor of the Exchequer (Mr. Roy Jenkins): The right hon. Gentleman pays much attention to this White Paper, to which I shall refer briefly, but surely he is aware that, whether rightly or wrongly, it does not deal with the compulsory policy but with economic policy and is equally critical. I think, of the methodology of the situation in the early 'sixties and of the situation in the middle 'sixties.

Mr. Heath: I disagree with the right hon. Gentleman's conclusion that it is more critical of the early 1960s. Its conclusion is specifically that, since 1966, this policy has done harm.

Dr. Jeremy Bray: The Lipsey-Parkin analysis ended in the second quarter of 1967, so it only


had the tiniest element of incomes policy after 1966. In fact, the greater part of the results arose from the application of incomes policy between 1961 and 1966.

Mr. Heath: I will quote from the conclusion:
This perverse effect is very noticeable in the most recent periods of 'restraint' since 1966".
That was the point I made. I do not extent it any further, but it is an interesting statement and worth considering. I am glad that the Chancellor intends to deal with it.
The order provides for a three-month delay and the House must ask itself why the Government are doing it. Can the whole future of the British economy at this stage depend on it? The Government have promised that they will hardly even use the power. That is not specifically in the White Paper but it is implied and we understand that it has been said by Ministers in their private meetings. So the Government are going through party and parliamentary turmoil for this, a three-months' delay, once again.
Again the Labour Party has been baring its soul. It has been going through the customary agony of Cabinet bickering, party quarrels and talk of defeat. Once again, the right hon. Gentleman the Chief Whip lectures his Members. This week it is not the stinking Tories refusing to bail him out but those skulking Left-wingers trying to do him in. I am sorry that the right hon. Gentleman is not here, and if it is because of indisposition I regret it. I hope that he will be in the Lobby tonight. Although he is absent, I must say that there is not much question of soul about the Chief Whip. His main object is to keep a bit of life in the body before it is finally committed to the deep. To do this, he has had to request his hon. Friends below the Gangway to recollect that they were elected to carry out their undertakings and must therefore support the Government tonight. Of course, he is entitled to say that, and I would endorse it. They were elected to carry out their undertakings, but those undertakings were precisely not to do what is being proposed today.
Then there is the question to which the right hon. Lady addressed herself rather

unsuccessfully in answer to one of her hon. Friends—why introduce the order now, with all the turmoil and trouble that it causes, when it is so shortly to be superseded by something else? We understood that it was to be very shortly but she did not care to give an indication.
We are, therefore, led to ask what is that something else which is so shortly going to supersede the order? The blunt answer is that the right hon. Lady does not know. She has not got a clue. Nor have her colleagues, including the Chancellor. If they have not a clue, why cannot she say so? If there are to be consultations about specific proposals with the T.U.C. and C.B.I., quite rightly, why cannot we be told about those proposals, which are to take the place of the order?
In fact, the Government have known for at least 18 months that they were going to have to take action by the end of this month. Once again they have been unprepared. Once again, this is just a stop-gap. It is not a bridge, because a bridge leads somewhere. In fact, no one knows where the order is leading. It is a stop-gap from the end of December. It is characteristic of this dilatory, incompetent Administration.
The truth is quite different. The Government really hope that, with a bit of luck, they will never have to introduce anything at all because they will be saved by the fact that there will be a new Administration after the General Election. Why should the Chancellor lend himself to this? In his Budget statement, he announced a bargain and I think that it was accepted by the House at the time as being a realistic and sensible bargain. The bargain was that the Government would abandon these powers and in return get effective reform of industrial relations. He believed, as I did, that the impact of this on the economy would be such that he would be able to accommodate the collective, free wage bargaining to which we are accustomed. That was clearly his deal and I believed it to be right. It proved a bad bargain.
The Chancellor has not got his industrial reform to improve production and the other things associated with it, such as delivery dates and the rest on which exports depend. He has not got a real incomes policy either. So he has


neither of his desiderata with which to satisfy his creditors. For him, it has been a bad bargain.
What is more, the right hon. Gentleman finds himself landed with a spiralling wage-cost inflation which must be causing him and his advisers considerable alarm. I mentioned this point in my speech on the Address. He was careful to avoid dealing with it then. I do not entirely blame him, but it is now being widely discussed here and overseas and he must realise, above everyone else, what the impact must be if the situation continues, as it is likely to do.
The right hon. Gentleman is suffering largely from the impact of the Secretary of State for Employment and Productivity and the Prime Minister in this wage-cost spiral. What about the right hon. Lady? Why does she put herself in this position, which is the most exposed of all those in the Government? She it was who clothed herself in white raimant to lead the crusade for trade union reform. This brought her great admiration in the country. I give her the credit of genuinely believing in it and thinking that she was right. But she did not know her man and he did her wrong. Having bowed down before the trade union leaders, the Prime Minister whipped off the right hon. Lady's white raimant. Now she clings desperately to that last figleaf, the three months' delay.
What about the Prime Minister? For him, the whole operation is, as usual, just a hollow sham. How irritating it must be for him to feel that hon. Members below the Gangway will not take the cue and realise the game that is being played. Do they not realise that he has one objective, quite naturally—to win the forthcoming General Election? There is not much room for him to manoeuvre. He knows, as the Chancellor knows, that the forthcoming Budget will help because it will include concessions. What is worrying the Prime Minister is how much it will help. Is the give-away going to be enough? If it is not going to be enough, because of the Letter of Intent and the I.M.F. watching over the Chancellor's actions, there is only one way to make people feel better and thereby try to get the polls up, and that is to put bigger wages in their pockets.
What the right hon. Gentleman wants is a roaring wage inflation for the next few months with the cover of respectability of the delaying order which he is undertaking not to use. How do we know all this? Because we have seen it happen before and it is described in the White Paper. It happened in the months leading up to the General Election of 1966.
The White Paper deals with the figures on which the election was fought—9, 5, 1. Nine for increases in wages, five for increases in prices and one for increases in production. I give it to the Prime Minister that it was the recipe then for electoral success, and he cashed in on it. But it was a recipe for economic disaster which hit the country on 20th July when he stood at the Dispatch Box and announced the Measures which have been perpetrated since. That is why it will not be the recipe for electoral success next time. The people of this country will always remember the way that they were deceived in the lead up to the 1966 election, and they will always remember the measures of 20th July which followed that General Election—[Interruption.]
I will illustrate the point with figures. On 20th July, 1966—[An HON. MEMBER: "What about the trade figures?"] I am coming to the trade figures. On 20th July, 1966, the Prime Minister said that money incomes had risen by £1,800 million, of which £1,300 million went in wages and salaries, and that we had earned only £600 million in increased production. Therefore, the July measures followed by the compulsory measures in Part IV, were instituted by the Prime Minister. That was when money incomes were rising three times as fast as production.

The Prime Minister (Mr. Harold Wilson): The right hon. Gentleman said nine times as fast.

Mr. Heath: I said nothing of the sort. I said that the relationship was nine for increases in wages, five for increases in prices, which is nine to five, and one for increases in production. This is 20th July, 1966. The Prime Minister was arguing that money incomes were rising three times as fast as production then and a freeze was necessary. I am quoting the White Paper for the period before the election. At this period in 1969 money incomes are rising four times as


fast as production. That is what is going on now in the rate for the second quarter adjusted to an annual rate.
Is it not, therefore, extraordinary that, after an election, when we had the ratio of three to one, the Prime Minister insists on the statutory compulsory powers, but, before the forthcoming election, when the ratio is four times to one, he is apparently prepared to abandon the whole machinery and to come back to this Order with the notification that he will abandon that as well?
There can only be one deduction. In the words of the Prime Minister, "the crucial issue is not the incomes policy, but the next General Election."
In their economic policies the Government have pursued three themes. First, the theme of planning. None of the targets under the National Plan has ever been reached, except that of Government expenditure. The plan was pronounced dead in 1966, and we buried the corpse of the D.E.A. just recently.
The second theme was investment which was to have been the key to growth. The Government promised a 50 per cent. increase between 1964 and 1970. That means £600 million at constant prices. The Government will be hard pushed to get half of that figure. Their investment policy has failed as well. The I.R.C. part of this policy, according to him, has achieved a fundamental reconstruction of British industry. The I.R.C., to take a generous figure, has achieved one per cent. of he total investment in industry in Britain today.
The third theme is the incomes policy. This is now marooned between the long-term failure of compulsion now and the short-term failure of co-operation. We are getting a last splutter of compulsion tonight.
For a time, a short time, there was a fourth theme—the reform of industrial relations. On that the Prime Minister capitulated and the results are clear. We have had the worst strike year in modern British history. Whether we take the number of stoppages, as the Donovan Commission recommended, or the number of days lost, as the Prime Minister likes to emphasise, it is the worst strike year in modern British history, and worse than the last biggest year of Conservative Administration in 1962. What is more, it is

clear that it has got worse since the Prime Minister's capitulation last summer.
What is left of the Government's various economic policies, as the Chancellor has rightly emphasised, is to rely on the remaining benefits of devaluation, and these he is loth to see eroded. Today's Financial Times points out that because of dollar inflation there is something left from devaluation in North America, but there is almost nothing left elsewhere. The right hon. Gentleman knows that dollar inflation—[Interruption.] I am quoting the Financial Times. I think that many people now believe from their experience that this is right. I know that is not the view that the Treasury likes to take in its official pronouncements, but in North America there is something left because of dollar inflation, though not so much in Europe.
I make this point because no one should under-estimate the task which still faces this country of establishing a permanently sound basis for its balance of payments. How much the Prime Minister has enjoyed his fun on the balance of payments figures—all those carefully prepared Answers and all those equally carefully prepared supplementaries—[Interruption.]
Let me reassure the Prime Minister. Nobody seeks to deny him his one talking point. But it might have been a little more honest of him to have followed the example of the Chancellor of the Exchequer in his speech on the Address when, talking about myself, he said:
I watched him on television when he said in his speech at Brighton that he genuinely welcomed the improvement in our trading and balance of payments position. He gave a good reason for doing so. I believed him."—[OFFICIAL REPORT, 3rd November, 1969; Vol. 790, c. 688.]
The Chancellor knows the reason that I gave—namely, that it is only by a surplus on the balance of payments that debt can genuinely be repaid. For my part, the less debt there is hanging around the neck of the next Administration when it comes into power the better I shall be pleased.
The Prime Minister might refresh his memory. I can send him the handouts, if he would like to see them, of all the other speeches in which I have paid tribute to the balance of payments improvement. I have welcomed it


realistically, as I do today, but pointing out the problems which still face us.
I should like to put this question to the Prime Minister and to the Chancellor of the Exchequer in view of their well known satisfaction with this position. Will the Prime Minister now resume publication quarterly, which he abandoned in 1966, of the full figures of short-term assistance debt which has been rendered to this country? Will he add to that the figure for the total debt, medium and short-term assistance, which this country has received and the amount which it now owes?
When the Chancellor comes to give the figure for the repayment of the debt, will he show how much has been repaid from surplus balance of payments, how much from the sterling area, and how much from the hot money coming into this country as a result of the high interest rates which are maintained today? They are sources of foreign currency to the Exchequer and to the Bank and they can be used for the repayment of overseas currency if so required. The country ought to know how the debt is being repaid. Is it a genuine repayment or is another debt of a deposit or some other kind being incurred in its place?
At the moment investment and development in this country are being sacrificed on the altar of high interest rates. I believe the reason is that the Government want to attract hot money into this country so that they can declare that they are repaying considerable amounts of overseas debt. If it is not correct the Chancellor of the Exchequer can immediately clear it up by publishing the figures and giving an analysis of the repayments which have been made.
Once again, in order to reassure the Prime Minister, let us all this afternoon unreservedly welcome the improvement in the balance of payments. [Interruption.] If hon. Members want to know all the dates on which I have done that I can give them. I will send them hand-outs and they can see each occasion. The Country remains unimpressed. I can understand that the Prime Minister must be perplexed by this. Why do people remain unimpressed? It is for two reasons. First, they know—what the Prime Minister never mentions—the price which has had to be paid and is still

being paid by the people for the achievement of an improvement in the balance of payments.
The price is the devaluation of our currency, a record increase in taxation, a record inflation—with prices rising twice as fast as in the previous period—crisis level interest rates—the highest, for the longest period, in two-and-a-half centuries of peace and war, an unprecedented credit squeeze, half a million unemployed, for the longest period since 1945, controls over prices and incomes, controls over travel expenditure abroad and controls over imports by way of the import deposits scheme. That is the price which has been paid to improve the balance of payments. Every time he emphasises the improvement let the Prime Minister tell the country the price which it has had to pay under his Administration.
To the Chancellor of the Exchequer, at a period when he is presiding over our financial destinies, when the domestic economy is subdued, when stocks are low—I understand that they are declining —when investment, to say the least, is sluggish, and when world trade itself is booming—having doubled its annual increase, I say, is it any surprise that the balance of payments has improved and he has this surplus? He would be honest enough to say that what does surprise him is that it has taken so long after devaluation to get these improvements in the balance of payments.
All is fair in the world of international trade today, but what will be the position when it changes? That is the problem. Everyone knows that American inflation will not continue beyond the early part of next year and that the expansion of trade in consumer goods which we have enjoyed in the American market for a reasonable period will not continue at its present rate. Is he taking into account all these factors in the steps that he is taking to deal with this situation? We have been in a uniquely favourable position since devaluation, with a boom in world trade. As Chancellor the right hon. Gentleman has the responsibility of telling the House and the people exactly what are the real factors which face us in our balance of payments in the future.
The second reason why the British people are not impressed is that they know


that the improvement in the balance of payments is not an end in itself; it is the means to an end. Therefore, the question that people ask is: are we going to see the sort of life that we want under an improved balance of payments? This is not unconnected with the order before us tonight. This is part of the way of industrial life which we have had in this country for so long—based on free wage bargaining—and it is this that the Government are asking the House to refuse once again to British industry. The people have now made up their minds that what the benches opposite offer them under the improved balance of payments is not the sort of life that they want.
Later tonight we shall come to another non-event, for no very good purpose. Later in the debate the critics below the Gangway will bark quite harshly, but they will not take any risks when the Division comes. They will not risk their licences. They are thinking too much about the next season, and the chance of getting them back. What is more, they have been told that if, according to the tradition of this House, they follow their voice with their vote, the leader of their party may resign. Resign—him? I beg the right hon. Gentleman's pardon: the right hon. Gentleman resign? Tonight? Bad, bad, bad—but not mad, mad, mad! Not yet. No, they know that they are safe whatever they do, and the Government will go on playing out time in this weary charade just as the country, equally wearily, suffers under this Administration, until the day dawns when the Government's time is exhausted. Then the country, with a gladsome heart, can make a fresh start.

5.45 p.m.

Mr. Brian Walden: A former Prime Minister of this country once said that he was not particularly concerned with what his Government said but he was concerned that they should all say the same thing. In other words—to put it more vulgarly—"Get your story straight". I do not think that even those handful of hon. Members who are enthusiasts for the Government's policy in industrial relations and are enthusiastic supporters of this order could claim that the Government have got their story straight; indeed, what we are being ask to do in reactivating the order depends upon a charitable view of the

arguments that were given in justification of it.
I want to start by saying that I think that that is not only a bad thing for the House of Commons but a very bad thing for the Labour Party. The Government have done many fine things. The weakest side—the Mr. Hyde side—of their record is that they got themselves involved in a sham and a pretence which they find it difficult to justify and which discourages their warmest friends and creates exactly that kind of doubt that will do them more damage at an election than an honest admission of a mistake.
A good deal of the trouble in which we now find ourselves depends upon a quite extraordinary account of the events of the last 12 months. I do not want to go through all of them; heaven knows, it was painful enough while it was going on. But the version which is now being put around is, to say the least, unhistoric. I am prepared to see history re-written, but a certain decent interval should be allowed to pass before that is done. If we are to accept a version of events—which, to put it bluntly, is largely nonsensical—any judgment made on the basis of that kind of assessment will necessarily precipitate us into a situation in which we are making policy on the basis of a nonsense.
We have an incorrect analysis. We have arrived at an incorrect judgment. We will not admit what has occurred. Is it therefore surprising that the policy that we get at the end of the day is largely indefensible?
What are the contradictions in this policy? What is the sort of thing that gives me concern? I do not claim to speak for anybody else—least of all for my hon. Friends on the Left of my party. I speak only for myself. What is the sort of thing that worries me about this policy, and what is the sort of question that I have asked to which I have not received a satisfactory answer?—although in my opinion my right hon. Friend the First Secretary made the best effort that I have ever heard her make to come to terms with some of the issues involved in this matter. I only wish that she had made the effort much earlier and in the right place—because the first place for this discussion should have been in the Parliamentary Labour Party. I


do not say that in derogation of the House of Commons.
It is this House which will decide policy. But if we are to decide things of this kind which are likely to give rise to serious doubts in our party and in our movement, the proper time to decide them is not a week before we have to vote upon them. I wish that my right hon. Friend had made her speech in the way that she made it a long time ago. However, that is irrelevant. I wanted to pay tribute to what was in all circumstances a very good statement of why the Government are doing it.
Unfortunately, it does not satisfy me, and there are a number of reasons why. I want this question dealt with at much greater length. Is this policy important? Are we being told, "You must go into the Lobby for this order because the restraint on wages and prices which we believe that we can get from it is of the greatest significance to our economic strategy and, therefore, we appeal to you as our followers to back our sincere judgment that, for us, this is decisive"? Is it that, or is it a case of, "Come on, chaps. This thing is such a piddling business and of such total insignificance that we cannot understand why you are all making a fuss about it. Why not just shut up and vote for us?"
Is it important? If it is, why are we taking it in this form? My right hon. Friend has said again and again; since she has talked about it on other issues, how very important it is that there should be certain powers to restrain prices. I can understand that. If she were saying that at the Dispatch Box, I might not agree with her but I could understand her reason for saying that this is part of a tough policy which will restrain prices, and that is why she asks us to vote for it. What I do not understand is all the talk of the tragic consequences and unmentionable horrors in terms of price and wage explosions taking away the hard-earned money which the Chancellor may distribute.
Unlike the Leader of the Opposition, I am not convinced that there will be massive give-aways all over the place. I reserve my judgment on that. We shall see. The Chancellor may distribute great largesse to the public, but it cannot be right to say that we are taking away

his chance to do it and that there will be terrible price explosions because there will be, anyway. Some of my hon. Friends would argue that there have been already. We all know the view taken by my hon. Friend the Member for Bosworth (Mr. Wyatt). His view is that there has been no reference to the National Board for Prices and Incomes of any recent wage settlement, that the barriers on wages are down, and that its effect on prices has been substantial. I support my right hon. Friend, because I would not go along with that argument. But what view am I to take of her case when she says, in December, that she will come along, let us say in May, and tell us that the powers can then go, that she will have some other arrangement, and that it will not be statutory if she has her way?
What am I to make of that? What then will she tell us about these great prices and wages explosions? My right hon. Friend knows that we are not arguing about incomes policy or all her many wise statements on the need for some sensible arrangement about productivity, prices and incomes. I do not know about right hon. and hon. Gentlemen opposite, because I regard them as irrelevant in this discussion. But we are arguing about paragraphs 32 and 33, about the statutory powers which my right hon. Friend assured us again today that it is her will and intention to give up. I believe her. I accept her assurance. Not only is it my duty to do so, but I do it because it is right.
But doing that will make a nonsense of her present arguments. I do not know how she will face the question which someone is bound to ask: what now about the great price inflation? Will there not be one? I should love to hear the case then. We shall not have statutory powers, but some other arrangement. I wish my right hon. Friend good luck but, whatever arrangement it is, I cannot feel that it would have greater merit than our abandoning the statutory powers now and going over to what then will be the situation, namely, a voluntary one. I am for the greatest amount of discussion, with committees trying to work out arrangements. However, like all my hon. Friends, I am a little sceptical as to how far this can be decisive. It might have some influence, but it will not have a dramatic influence.
Why is it that we intend to hold wage and price inflation at bay now but that we do not intend to hold it at bay when the bridging arrangement comes to an end in six months' time? What arguments will be used then to disprove those which tire put forward now for keeping the powers? That is a difficulty which I constantly have with the Government. They give me a case on one issue which they repudiate on another. We have all had experience of it. What will they do in six months to repudiate what they tell us today?
I turn to the higher-paid and lower-paid workers, about whom quite justifiably my right hon. Friend makes a weighty statement. She is one of the most skilful advocates in politics. Naturally, she does not give the Parliamentary Labour Party a long talk on matters like the perilous effects of wage inflation. The Leader of the Opposition will have noticed that, when he said that what Governments want before elections is roaring wage inflation, some of my hon. Friends greeted his statement with scepticism.
My right hon. Friend does not say that the policy is designed to produce a hold-down of wages. Naturally, she talks to us about prices. If she gets on to wages at all, she talks about the lower-paid workers. I have heard so much about this sector of the community that I feel that someone ought to make one or two comments. First of all, let us be fair to the Government and to my right hon. Friend. Before this Government came into office, there were lower-paid workers. When my right hon. Friend took over her present responsibilities, there were lower-paid workers. She did not create them. They were always there. It is fair to say, to, that the incomes policy did not create the problem of substantial differentials. However, it has not done much about it. The constant claim that it has is against all the evidence.
When my right hon. Friend says, as she did today, that we must have this policy because it is quite wrong that powerful groups should selfishly pre-empt resources which should be more fairly spread, that is what has happened under the policy. That is exactly the situation now. The policy has penalised the lower-paid, for the obvious reasons that we have heard so many times before that I will

not weary my hon. Friends by going through them in detail. There are obvious reasons why the lower-paid are easier to control. It is a point on which the right hon. Gentleman should at some time—not in this debate—gives us his further thoughts.
I think that my right hon. Friend makes a palpable hit on the right hon. Gentleman when she suggests that previous Conservative Governments resorted to the public service and workers under their own control at least to begin—no more than that—an incomes policy. I regard many of the workers in the public service as being amongst the low-paid. It happens that many lower-paid workers are directly or indirectly controlled by the Government. That is one good reason why this policy has operated against the lower-paid.
Another good reason is that God loved ordinary people: he made many of them. Wherever there is an increase for the lower-paid, many people will get it; whereas, when there is an increase for those in a more substantial position in life, it is likely to have less of a total effect. This is one of the facts of life. All this has been true under this policy.
My right hon. Friend says that it will all be different in the future. I mean to be in no way offensive when I say that we have heard that love song before. It is always going to be different. I have heard that again and again and again at successive stages of the policy, both when it was coming forward in the escalatory phase and now when it is in what my right hon. Friend calls the de-escalatory phase. It is always the same song—the lower-paid workers will be substantially benefited.
Indeed, my right hon. Friend could justifiably ask me: is there not some recent evidence that they have been better treated? The answer is: "Yes, by an abandonment of any pretence of a reference of their wage claims to the National Board for Prices and Incomes"—in other words, a voluntary policy: "Let them have it. Do not use the statutory powers which the Government have".
This is why I raise the whole subject. I put this to my right hon. Friend and to the Chancellor, who is to wind up the debate. There is no reason why he should answer it—I am not that important—


but if he wishes to deny it I invite him to do so. I will make a prediction about what will happen if the order goes through tonight. The lower-paid workers will not have their increases stopped, because the Government dare not, partly for reasons of social justice and partly because of electoral considerations. The better-paid workers will not take a blind bit of notice of it, anyway, and will walk straight through it.
The 2½-4½ per cent. norm is an insult to the intelligence of the House. It is a purely notional figure. Indeed, we are told that my right hon. Friend the Chancellor did not want it, anyway. He preferred to go for the straightforward 3½ per cent., not that that would have had any relation to reality either, though it would give less trouble. However, he negotiated with my right hon. Friend the Secretary of State and they eventually arrived at this purely notional figure which will have no relation to what happens.
I invite my right hon. Friend the Chancellor to comment on that and to tell us whether he thinks now, as incomes policy slowly goes into its twilight, that he has the strength to hold back the really powerful unions, as we have not been able to do in the recent past, and that he has the nerve to deny increases to the lower paid.

Mr. Alexander W. Lyon: My hon. Friend is always persuasive. Perhaps he can persuade me of this little point. When the lower-paid workers have broken through the incomes policy and it is destroyed, does he assert that in the free-for-all that will ensue the lower-paid workers will do better than they did under incomes policy?

Mr. Walden: That is a very good question. I will give a direct answer and then comment on it. The direct answer is that I think that they will. [An HON. MEMBER: "They never did before."] One of my hon. Friends says that they never did before, but that is not accurate. What my hon. Friend said in effect was that under the completely free bargaining system many people were underpaid. In any case, the system was not completely free. Historically we had developed all sorts of things, but the system was never completely free.
The terms "higher paid" and "lower paid" are not in some ways as precise and descriptive. What we developed were workers who palpably were paid less than their skill, experience and contribution merited, even at market rates. That is what we mean when we talk about the lower paid.
I tell my hon. Friend the Member for York (Mr. Alexander W. Lyon) frankly that I think that that situation will stop, for a perfectly straightforward reason—I give this to hon. Members opposite, especially one of them, for what it is worth—because of the power of market forces. I think that these will operate in the situation that we are now in and that they will produce a situation in which lower-paid workers will get increases.
I said that I would first give an answer and then make a comment. I will give this to my hon. Friend. He asked me for now and I answered him for now. I do not think that it is a satisfactory situation for the increases and economic strength of the lower-paid workers—indeed, not only the lower-paid workers but those who are not organised and those who are in some other way disadvantaged in the scramble —to be for ever, or indeed for a long period, dependent on the forces of the market.
This is why I am a believer in incomes policy—voluntary incomes policy. That makes sense. I have never denied that. I suspect that some of my hon. Friends do not want what is called a free-for-all for that very reason. My hon. Friend asked me what would happen now. I tell him, but I say that the good side of the White Paper is those proposals that will lead towards a development of a rational, voluntary policy.
On that subject I will say one further word to my hon. Friend, who is a well-known sceptic and also a very good friend of mine. Of course a voluntary policy is not neat and it is not precise; we shall get cheated on it and not everyone will observe it as we should like to see it observed. But there are disadvantages either way. The chaos, the heartache, and the trouble, that we have had from the statutory policy make the other gamble worthwhile.

Mr. Alexander W. Lyon: I concede immediately to my hon. Friend that for us in politics it would be so much easier


to have a voluntary incomes policy, but it is pie in the sky to think that it will be better for the lower-paid workers. The advance of technology is bound to hit the lower-paid worker and the unskilled worker far harder than the more technologically advanced.

Mr. Walden: My hon. Friend knows that I never avoid an argument. However, I do not want to go too deeply into this question, because I want to revert to another question. In speaking of the advance of technology, he probably under-estimates the effect of the advance of technology of the composition of the work force. There will be a very substantial change there, too.
One of the most encouraging things is that many categories of workers that we have traditionally regarded as being lower paid will have the kind of work that they do—and, in some cases, even their very job—transformed by technological development. However, I must not pursue that point too far, though I am always glad to give way to my hon. Friend.
I return to the order, which seeks to continue the incomes policy. I have stated a number of contradictions that I see in arguments that have been advanced. The Chancellor will no doubt seek to answer these points. My right hon. Friend is a hawk on incomes policy. People at the Treasury tend to be hawks, at least while they are there. They become dove-ish later.
I ask my right hon. Friend seriously —not to score a cheap debating point; he knows me better than that—to look at the sort of statement he makes about it and the sort of statements that others make about it; the sort of thing that is said to this group of Members and the sort of thing that is said to the other group of Members; the hotchpotch of contradictory assertions about its importance, about its relativity to wages, about its operation upon prices, about the length of time for which it is likely to go on, about what is likely to succeed it, about how that operation from what we have got now to its successor will be carried out; about the timing of this in relation to the Budget, and about the predictions as to what the situation in terms of inflation will be this summer. If he does, my right hon. Friend will not find it hard to realise how difficult it is to

understand exactly what message the Government wish to convey. I am certain that what my right hon. Friend says tonight will be lucid, clear, and hawkish, but he will still need to resolve in some other way the inherent contradictions which have grown up in and around this policy.
I cannot vote for the Government. I regret that, but I cannot do so. Many of my hon. Friends whose conscience, and experience are not less than mine, and in many cases are greater, will vote for the Government. Many of them will be unhappy about doing so, but I respect their decision as they will respect mine. We have been promised that this is the last time. It had better be, because this exercise cannot be gone through again. I do not claim to speak for all my hon. Friends. Indeed, I do not speak for anybody but myself. My judgment is that we are at the end of our tether on statutory policy.
If my right hon. Friend asks whether I concede his difficulties, the answer is "Yes". If he asks whether I concede his achievements, again my answer is "Yes". I think that his achievements are remarkable, and I dissent from the Leader of the Opposition. The right hon. Gentleman cannot simply brush away not only the improvements in the balance of payments but the improvement in the level of internal credit. He cannot brush away our present policies in relation to a number of things and say that this is of no consequence and no significance in view of the price paid. I suggest that even taking into account the price paid, my right hon. Friend's achievements are remarkable.
If my right hon. Friend could ask the final question, which is the decisive one, whether I will allow him room to move in terms of economic management, without all this fuss, without keeping him out of his Department, without wearying my colleagues, without abstaining from voting, and so on, my answer is simply that he should use the monetary means which are working very well at the moment. That is the answer.

Mr. Frank Hooley: High Toryism.

Mr. Walden: My hon. Friend says that that is high Toryism. In fact it is


economic commonsense, and I shall tell my hon. Friend the difference between my view and the view held on the benches opposite. I believe that we are going into a situation in which we shall have a substantial surplus on the balance of payments, and growth. In that situation we shall be able to distribute resources more equally. We shall be able to expend more on the things on which we wish to expend the money, mainly the social services, and those things which advantage those who are in need.
We shall be able to do all that, and in those circumstances it is wrong to say that there is something wrong, or Toryish, or bizarre, or unfashionable, about monetary policy. Monetary policy is an excellent way of controlling the economy. The reason why some of my hon. Friends object to monetary policy is the reason why, in the past, I have sometimes objected to such a policy. I object when it is operated in a deflationary situation, in a situation in which growth is slow, or in a situation in which unemployment is very high. In those circumstances its operation is almost inevitably bound to be unfair. It is, of course, sometimes unavoidable. I am prepared to face that. Sometimes one has to bite into a sour apple, but it is not palatable then, and it has bad effects, and my party has condemned it.
To suggest that monetary policy is not decisive, indeed, to pretend that it is not monetary policy which has brought us to where we are in terms of a surplus on the balance of payments, is nonsense. I hope that my hon. Friends will not swallow all this nonsense about the I.R.C., a prices and incomes policy, and so on.
What has put us where we are is devaluation and the Chancellor's monetary policy. That is what has created the surplus. This is essentially the reason why I do not believe in continuing an irrevelant, irritating sham order which is no more than a gesture, rather than going over to the policy which we shall be operating before the next Election, and which I believe will survive for many years.
I say to my right hon. Friend, "Do not do this again. Do not get yourself

into a situation where, instead of working on the genuine merits of what you have done, instead of building upon the great achievements of the Government, you underrate our intelligence and the intelligence of the country and depend on a gesture, a sham and hollow nonsense."

6.16 p.m.

Mr. Enoch Powell: The speech of the hon. Member for Birmingham, All Saints (Mr. Walden) was a plea for the abandonment of pretence. So also will my own speech be, for I believe that this is a subject on which there has for much too long been much too much pretence.
The situation of the right hon. Lady this afternoon was not so much that she had an embarrassing task, or a difficult task, as an impossible one. She was asking the House to support the order on the ground that if it were not made a number of serious consequences would follow. The right hon. Lady has described how
if an all-clear was given over the whole front a number of manufacturers would want to take advantage of it, and there would be a renewed inflationary spiral.
The Prime Minister has talked of the use of powers
in particularly blatant cases".
cases
highly provocative to the generality of the trade union movement".
At the same time, and almost in the same breath, the right hon. Lady has forecast—not for the distant future, but in a matter of months—a new dispensation, which will render all this unnecessary, so that it will be possible, and she expects, to revoke these compulsory powers in the course of first enacting it.
The House is therefore bound to ask what is this extraordinary revolution which is foreshadowed in the months immediately ahead? We know from the Government themselves that the long-term policy which they envisage requires that "old institutions and long-established attitudes" should be "changed". They evidently have not been changed yet, or this order would not be necessary. Yet presumably this change, this revolution, this blinding light upon the road to Damascus, is going to happen in the next few months, except that Saul did not know it was going to


happen, whereas the Government know it is going to happen this Session.
We are left asking of what nature it can be. Rather, we are told what the new legislation, what the new dispensation will be. The secret is going to be the establishment of a new board: or, rather, not a new board, but an amalgamation of two old boards. This is the only known prospective measure; yet it is to change the entire attitude of those who bargain about wages, those who fix prices, and make it possible to turn over from the old dispensation to the new.
This is not the first time that the present Government or any Government have sought a respite for a few months by inventing a new institution or refurbishing an old institution to do for them what they cannot do for themselves, to invent for them what they cannot invent themselves, and to imagine for them what they find it impossible to imagine.
The fact is that the Government have got themselves stuck with an absurdity, out from under which it is indispensable for them, one way or another, to crawl—I have used a less elegant expression than "de-escalate"—in the months before the General Election. They have decided —it does not look as though their decision has been tactically very successful—that the process, undignified any how, will be slightly less undignified if it is accomplished in two stages, and this represents the first stage.
But an absurdity it is, and an absurdity it remains, with which they are stuck, whether they get out of it by a transitional process or, as many hon. Members opposite wish and we on this side of the House recommend, it is dropped at once. The nonsense, the absurdity, to which I refer is what is known as "a" or "the" —I am never quite sure whether it is the definite or indefinite article which is appropriate—prices and incomes policy.
It seems to me important in debating this subject to define the sense in which that term is being used, because there is a sense in which all economic policy is concerned with prices and incomes. Most economic policies either directly aim at, of take account of, the desirability of avoiding or minimising inflation Therefore, if we are using the term in that broad sense, there is nothing to debate about. But the expression "prices and

incomes policy' has acquired—and we are using it in this specific sense, of course, in this debate—a perfectly precise meaning. It means a policy which seeks to attain certain results, such as the avoidance or reduction of the rate of inflation, not by general measures but by operating directly, by influence or by compulsion, upon individual prices and wages. It is the conception that if all individual prices and wages are fixed and determined in a particular way, a certain sum total or general result will follow. That is the essence of any prices or incomes policy in the sense in which we are debating it—the attempt to restrain or prevent inflation by operating separately upon all prices and wages as they are fixed.
This process obviously would in any case present enormous, if not insurmountable, technical and administrative difficulties. It implies upon the part of Government virtual omniscience and ubiquity, since wherever a price or wage is being changed, there—promptly and infallibly, for the process to succeed—the right degree of influence or compulsion must be brought to bear.
But that is much the lesser part of the inherent difficulty—I would say the inherent impossibility—of a prices and incomes policy. The essential impossibility is to define the way in which individual prices and incomes have to behave in such a manner that anyone can apply the policy in practice. The policy starts from a truism which, like all truisms, is true. That is that, if the total of all incomes rises faster than output, there will be inflation. Sure enough, if output rises at 3 per cent. and the total of incomes rises at 6 per cent., we shall have approximately 3 per cent. inflation. Unfortunately, this undeniable truth does not enable anyone to know how any particular wage or price should behave so that, in conjunction with the behaviour of all the other wages and prices during the same period, the desired result of a total outturn of 3 per cent, and not 6 per cent. would be produced.
In any change in a wage—and I shall concentrate, purely for the purposes of illustration, upon wages, though the same arguments apply to prices—one can distinguish three distinct elements. One element is the relative change in that wage in relation to other wages. Clearly such change must be going on all the


time. The constant change in the pattern of economic activity must be reflected in changes in the relativity of wages between one occupation and another, one employment and another. If these relativities were rigid, the economy would seize up. I do not believe any hon. Member denies that it is essential to the working of an economy which any of us would envisage that there should be continuous and appropriate changes in the relativity between one wage and another. So that is one element in every change in a wage—an alteration in its relativity.
The second element divides in turn into two. This is the part which is shared with all other wage changes—the general rise in wages. This we can only detect ex post facto. It is only after the end of the year, or whatever the period may be, when the statisticians have got it worked out and corrected it and corrected it again, that we can say there was a general rise of wages in such-and-such a period of so much per cent. We can then sub-divide that element into two parts. We can say that part of it corresponded with the total increase in output and was therefore not inflationary. We can also say that the remainder, the excess, was inflationary.
So in any wage increase we can distinguish these three elements: the relative element, the element of general increase which corresponds to increase in total output, and the element of general increase which is inflationary.
The heart of the difficulty is that none of these can be quantified in advance. We can quantify them only after the event, often long after the event. No one knows. When a wage is altered, how far the alteration corresponds to a genuine change in the relative supply and demand for that service as compared with others. Let us suppose that a wage increase is negotiated—willing employers, willing employees—at 10 per cent. At that moment no one knows what part of that 10 per cent. increase—which may be the first increase for two or three years, which may or may not be accompanied by alterations in productivity, in methods —represents a genuine change in relativity which is right and proper as part of the working of the economy. By the same token, no one knows either what are the

other two elements in that one change. We do not know what the increase in output will be during the current period. It is all very well for the Government to say, "We estimate it at 3½ per cent." In practice, it varies between 1½ or 1 per cent. and as high as 5 or 6 per cent., a degree of error which can vitiate any policy founded upon one particular figure.
Worst of all, only at the end of the day can we disentangle the inflationary element in that 10 per cent. wage increase, if there be any at all. It is no use coming back a year later and saying, "Inflation that year was 5 per cent., so if that wage increase had been 5 and not 10 per cent., and all other increases had been 5 per cent. less, there would have been no inflation". That is true, but only after the event can it be known.

Mr. James Dickens: In 1968, the index of retail prices rose by about 5 per cent. Is the right hon. Gentleman aware that the component parts making up that rise were, for example, import prices 1·7 per cent., net expenditure after taxation 1·8 per cent., and money wages were only part of general domestic costs at 1·4 per cent.? The right hon. Gentleman must try to avoid the error of arguing that money wage increases are a major factor in inflation per se.

Mr. Powell: The hon. Gentleman will recognise that output and income are two aspects of one and the same thing. However, it so happens that I was about to advert to the year 1968–69 in the course of my argument, a year when there was a dramatic illustration of the point which I am making.
The Government themselves—this was disclosed more or less accidentally, I think, in the Defence White Paper of February, 1968—based their own estimates and calculations on the assumption that the national income in money terms would rise by 11½ per cent. in the year 1968–69, of which they then estimated that only 4 per cent. would represent real increase in output. They themselves, therefore, were expecting, were estimating and were calculating upon a rate of inflation of 7½ per cent.— slightly larger, I think, than in fact happened. Yet at the very same moment they were commending to industry and to the trade


unions a policy which purported to be based upon the assumption that there would be no inflation at all and that, therefore, the only increases which could be permitted would be non-inflationary increases, either relative or corresponding to the increase in output. The whole notion of a policy which can so determine individual prices and wages that the sum total after the event proves to have been identical with the rate of increase of real output is an inconceivable operation. This is reflected in the fact that the instructions for carrying it out in one White Paper after another are perfectly general. They remain at the level of generality because there is no means of getting across from the general but empty propositions to the actual decisions which would require to be taken or to be imposed.
There has been a great change in the Government's financial policy in the last two years. It is a change which coincided, not accidentally, I think, with the arrival at the Treasury of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). Since then, partly under external pressure but partly, I believe, in accordance with his own beliefs, we have heard a great deal from him about control of the net borrowing requirement, and about control of domestic credit expansion. The basis of his policy has been that, unless the net borrowing requirement is correctly handled by the Government, and unless domestic credit expansion is rightly controlled, there will be inflation, and nothing else can prevent it. So we have the admission from the right hon. Gentleman the Chancellor of the Exchequer that during the very months when he and his colleagues were commending to the country a prices and incomes policy—and a statutory, compulsory prices and incomes policy, at that—as a means of preventing inflation, his predecessor was actually causing inflation, and causing it on a grand scale, by failing to control those two significant variables upon which our foreign creditors eventually insisted that we concentrate.
In fact, the Government have been using a prices and incomes policy not as an economic instrument—it is not an economic instrument because it is not intelligible and is not applicable—but as a political instrument. They have been using it as a guilt transfer mechanism, as

a means of transferring to the public at large the blame for the consequences of what they themselves were doing or in the past had failed to do. In this White Paper, we still see the same use being made of the prices and incomes policy. At the top of page 9, it is said:
Whether it"—
that is, the policy—
succeeds depends not just on what the Government does, but on what choices individual men and women make".
That statement is complete humbug. The choices of individual men and women are not in play in the fixing of prices and wages. If there is a general increase of demand of 5 per cent., it is not open to any individual man or woman to say, "I will not play on this. I shall so behave that I influence the movement of wages and prices." It is not possible for either the individual employee or a group of employees to say, "This is the price or the wage according to supply and demand at the moment for this type of labour or that article, but I have been reading the White Paper, and I shall insist on taking 2½ per cent. or 3½ per cent. less".
It is an absurdity. There is no reality in the notion of individual men and women deciding whether there shall be inflationary or non-inflationary wage increases. They are caught up as individual men and women—of course they are—both in the real economic forces to which the hon. Member for All Saints referred and in the monetary forces unleashed and only partly controlled by the Government themselves. The Government's purpose is to transfer the responsibility and the blame for their failure to control inflation to the ordinary men and women of this country on one side or the other of industry. So we come upon the only efficient aspect of a prices and incomes policy, namely, as a political device between the Government and the governed, and not as an economic instrument.
We must not take refuge in the belief, we must not lay to ourselves the flattering unction, that there is a world of difference between a compulsory and a voluntary incomes policy. Exactly the same reasons which make a compulsory incomes policy inconceivable make a voluntary incomes policy, if possible, more inconceivable. If it is impossible for a Government, with all their resources, to predict and prescribe


in advance how myriads of prices should so alter that, added together, they produce a specific result, it must be impossible for people by themselves to guess it; and, if it were possible, by the utmost stretch of compulsion, to make every price and income so vary that they fitted together in the required manner, how could one imagine that result if the situation were one of "Take it or leave it", in which one interpretation of the policy was followed by one set of people and another interpretation by another? A voluntary prices and incomes policy is just one stage more inconceivable than a statutory or compulsory prices and incomes policy.
I do not believe that either we in this country or the government or economists of any other country have succeded in isolating and defining all the causes of inflation satisfactorily. I believe that we have identified some of them. I am sure that the Chancellor is right when he says that the manner in which a Government finances its net borrowing requirement is one of the factors. When he says that the movement of domestic credit is one of the factors I am sure that he is right; but I am not sure what is the right definition of domestic credit for this purpose. I am not sure that these are the only factors; but even if we are right in defining these as two of the major factors, we are still far from understanding, if we ever shall, how a Government can so precisely control them that it produces the object, in terms of stability of wages and prices, at which it is aiming. This is a subject upon which in all countries, in all parties, the humility of no more than partial knowledge is enjoined upon us. But, just because we cannot fully measure or define the causes of inflation, just because the Government are only exercising a very crude form of management when they operate upon their net borrowing requirement and the expansion of domestic credit, we have no excuse, on either side of the House, for concealing either our ignorance or our unwillingness to use the instruments that we believe are effective and appropriate by parading a policy intended to be carried out by other people, a policy on which they are given remarkably little instruction and guidance, a policy

which is ultimately undefinable and unintelligible.
It is a deception practised by the politicians upon the people. It is one of those pretences which it is high time we on both sides of the House should allow to be dropped. We might as well make a start upon that resolve tonight by throwing out this Motion.

6.43 p.m.

Mr. Douglas Houghton: The House has listened to three major Opposition speeches—one from the Leader of the Opposition, another from the "grey Shadow" Leader of the Opposition, the right hon. Member for Wolverhampton, South-West (Mr. Powell) and one from an embryo Leader of the Opposition, the hon. Member for Birmingham, All Saints (Mr. Walden). Perhaps it will not be inappropriate for me to speak in support of the Government before other Opposition spokesmen spring to their feet, on both sides of the House. The Leader of the Opposition spoke for a long time, enjoyed himself for quite a lot of it, embarrassed some of us by his intimate knowledge of women's clothing, and at the end of his speech had nothing to say except "drop it". That is precisely what the right hon. Member for Wolverhampton, South-West said.
We do not look these days to the Leader of the Opposition for expositions of constructive Opposition policy. There is far too little of it in these difficult times. Merely to make as much mischief as possible for a Government and stir up as much trouble between the Government and their supporters is not a very noble rôle for a responsible Leader of the Opposition.
The proposal to renew this order was not sprung upon us. It was announced to the House as long ago as the Chancellor's Budget Statement. It was renewed in the Gracious Speech and the Debate on the Address. It has been before the House for a long time. The Chancellor announced the Government's intention to ask the House to do this before the terms of the Letter of Intent to the I.M.F. were finalised and before it was signed. Hon. Members on both sides who feel that this may have been thrust on the House just before Christmas should remember that we have had quite a lot of time to think about it.

Mr. Heath: Let me assure the right hon. Gentleman that we have made no complaint that this was being thrust upon the House. The Chancellor announced it in his Budget when he announced the industrial reforms, as well as the abandonment of the powers.

Mr. Houghton: I was referring to a comment made by my hon. Friend the Member for Birmingham, All Saints.
There are three groups of hon. and right hon. Gentlemen on this subject. There are those who have opposed this form of prices and incomes policy from the beginning and all along; there are those who supported it to begin with but who are now doubtful about renewing it even for a limited period and for a limited purpose; and there are those—I include myself here—who have supported this policy from the beginning and support renewal now. I moved the very first Motion at the T.U.C. on an incomes policy. I got short shrift 16 years ago, but I have watched events since and seen how the acknowledgement of some regulation of increases in wages and incomes has become an almost indispensable part of any rational economic policy.
This policy has been justified, with all its imperfections and injustices, although much that has been said in criticism is true. There is nothing scientific about wage fixation anyway. The prices and incomes policy may have smoothed out some anomalies which might have existed under a free negotiation system, but it may also have created others. It is very much a blunt weapon to use in a situation in which refinement is so difficult.
From personal knowledge I deny much of the criticism that has been made of this policy in relation to the lower-paid worker. It has never been possible for employers, whether Government or private, to bestow on lower-paid workers, increases of pay without counting the cost in repercussions and relativities and without negotiation. I do not know any sensible employer, certainly no Government Department, who would say, even o lower-paid workers: "This is what we shall give you, come what may, and we do not care whether you like it, or your unions like it or whether other people are content with it." This cannot be done in wage fixing and negotiation. Anyone who has moved in this

area realises how sensitive the trade union movement and workers are to relativities. In some ways they are the curse of wage fixing. When one does something to improve the position of a deserving group, others say. "If they are going to have it, we want it, too."

Mr. Orme: We all do.

Mr. Houghton: I know all the aspects of this, but it does not make life any easier in wage regulation.
In the public sector the Government have, in negotiations, increased the earnings of lower-paid workers in advance of increases given to higher-paid workers, sometimes by giving to them at a different time, sometimes by giving higher increases at the same time. I have been in public service all my life and for more than 30 years I was responsible for negotiations on wages and salaries over a very large area. Although not directly connected with it now, I have been watching what has been happening in the sector which I know so well.
Not all the criticism by the Opposition of the position of the lower-paid worker can be laid against the prices and incomes policy. I think that very little of it can. I do not think that by itself it has worsened the position of lower-paid workers. Nor do I believe that even differentially it has put them at a disadvantage.
The simple issue in today's debate—although the speeches have gone so wide over the whole field of economic policy —is whether we should renew Part II of the 1966 Act for a while longer. That is the issue. Formally, not even the White Paper is before the House at the moment. What we shall vote upon tonight is whether the Government's proposal to approve the order shall be passed. We must consider whether the end of this month—a few days time—would be a suitable time to drop Part II.
One may say that it has been imperfect in operation and that it may not have achieved all the results hoped for. Much else may have been wrong with it, but the question is whether we think this is the moment to accept the plea of the two right hon. Gentlemen who have spoken from the Benches opposite that it should be dropped at the end of the month. They say that we should drop it and put


nothing in its place. I believe that that would be giving entirely the wrong message at home and abroad on our attitude towards the underlying trend of sharp increases in earnings at the present time.
When we criticise a particular weapon in the assorted armoury of economic policy and Budgetary strategy, I remind the House that the Conservative Party was strongly against continuing the £50 limit on overseas travel allowance to which the Chancellor stuck firmly in his recent speech in the House. The Opposition were also against the Chancellor's proposition to introduce a new Bill to renew the import deposits at a slightly lower rate. They have opposed separately each proposal the Government have brought forward as part of the collective attack upon inflationary trends in the economy. We must therefore appraise the Opposition's present attitude to the order in the light of what has gone before.
I must also remind some of my hon. Friends that if they vote against the Order—or do not give it support—they will be failing to give the Government their support on one item of a series of economic measures which they have supported in the past, and it seems to me that it would be difficult for Government supporters to be so discriminatory over which of the economic measures they will support and which they will not support when they have been so closely associated for so long in their mutual support.
It would be unwise to drop Part II at the end of the month because at the moment—I think the right hon. Member for Wolverhampton, South-West (Mr. Powell) referred to this a few minutes ago —there is a sharp upward trend in earnings, which one reads about now in economic comment. It was referred to in the the Economist of 15th November; the Deputy Leader of the Opposition was reported on it in the The Times Business Section of 19th November; it was referred to in the Financial Times of 13th December and in the Economist on 13th December. At the beginning of the article in the Economist of 13th December—and I do not know whether this is appropriate to some of my hon. Friends —we read:

When you're wounded, and left on Afghanistan's plains,
And the women come out to cut up what remains,
Just roll to your rifle, and blow out your brains.
And go to your God like a soldier.
If the cap fits anybody he is welcome to it.
In The Times Business News on 19th November, the Deputy Leader of the Opposition is reported as having said:
Let no one be under any illusion. We are facing such an explosion now.
He was referring to a wage explosion, and he continued:
Yet the Government seem deliberately to have given up any attempt to control this situation. Their incomes policy is in ruins; the prospect for prices is a very gloomy one.
I should have expected the Deputy Leader of the Opposition to come to the House this afternoon and commend the Government for at least a good try to do something about it in the next six months.
To the question why it is important to keep the power, if after a very short time it is proposed to drop it, my answer is that the intervening period may be the most crucial. If the trend is sharply upwards now, one has to deal with that trend now. It is not enough to say "Let it go; let it drop, because nothing much can happen in the next few months and we can go forward with our more comprehensive machinery for dealing with prices and incomes later." One has to deal with an emergency situation—and I believe that it is little short of that—by what emergency action is at hand and in this case it is the renewal of Part II of the 1966 Act.

Mr. William Molloy: Is my right hon. Friend being fair to the Leader of the Opposition? The Director-General of the C.B.I. claims that investment in British industry is falling because of the Government policy of price control holding down prices, while the Tory Party, with, I take it, the approval of the Leader of the Opposition uses political advertisements claiming that because of Government policy prices are rising.

Mr. Houghton: It is not part of my job to get the Leader of the Opposition out of his dilemma, still less need I be fair to him in his dilemma. I can quite understand that he is in one. There is


nothing in what he said this afternoon to show that he understood the particular problem with which the Government are dealing now. The two things together semed to me to provide a considerable case for going on with the reactivation of Part II They are, first, the economic desirability of doing so, and, second, the desirability—indeed, the essential need —for the Government to avoid a further political retreat. To combine economic misjudgment with a further political retreat would be very damaging to the Government's prestige and for the future of their economic policy, because if people do not have faith in the Government they cannot have faith in their economic policy. What will distress our supporters is the divisions on our benches this afternoon.
The real debate is between some of my hon. Friends and others of my hon. Friends, because we know where the Opposition stand. They have been against us all the time. They have never believed in the policy—at least, they have never voted for it. Therefore, we can wash them out of the discussion. Nothing they can say will help us to cope with the situation. I thought at one time that the Leader of the Opposition would be so rude to some of my hon. Friends that he would close the ranks on these benches, but he skilfully moved away from any attempt to do that.
When wage increases are now running at a rate which will possibly inject £3,000 million a year extra into consuming power, it is not the moment to play fast and loose with any power that one possesses to try to curb them. The estimate that earnings are running at about 7 per cent. above what they were at this time last year is something which my right hon. Friend the Chancellor cannot face with equanimity. He will have his room for manoeuvre, his economic and budgetary strategy, eroded before his very eyes if this trend continues. He will not have the freedom he wishes to have at the time of the introduction of his Budget, because what he would otherwise have wanted to do will have been forestalled by unregulated rises in income, with all the economic consequences of that in inflationary tendencies. The Economist said the other day that if this were to continue it would be flabbergasting, which is an extreme word to use.

Mr. Orme: If this is the case, is it not happening now with the prices and incomes policy? All the Government are asking for is a reactivation of the same policy. Are there not other measures that need to be taken to deal with the situation? What is the difference between now and early January?

Mr. Houghton: My hon. Friend has not told us what other measures could be taken. He may do if he catches your eye, Mr. Speaker. My hon. Friend the Member for Birmingham, All Saints (Mr. Walden) said, "Use the monetary policy, which is the most effective", as if it were not being used already. It is a matter of judgment as to how far one can use one particular method of controlling the economy, how far one can push it without harmful consequences in one direction or another. I think that keeping the balance, having some sort of coherence, preserving the harmony of one's controlling operations, is the skill, talent and judgment required of a Chancellor of the Exchequer.
I would say that if the order is dropped my right hon. Friend the Chancellor will have nothing. My hon. Friend the Member for Salford, West (Mr. Orme) asks why since the Government have the powers of Part II now, the upward trend of earnings is not being checked by the policy the Government want to continue. It is true that so far this upward trend has not been checked, as I think it should have been, by the use of the powers the Government already have. But if, because they have not used them effectively up to this moment, they drop them altogether, they lose any chance of using them in the next crucial few months. It may be that the Government will find it imperative, however distasteful and however difficult, to use the powers which the order will give them for the next few months.
I come finally to the further question which has been asked. My right hon. Friend the Prime Minister described this as a bridging operation. I am not at all surprised that some hon. Members on both sides have said, "We know where the bridge starts from—it starts from here. But where does it end?" The right hon. Member for Wolverhampton, South-West made great play with what was apparently on the other side of the bridge. It was not a new board, he said,


but two old boards brought together, and so on. One can be sarcastic and derisory about these things, but when the Government have announced that they are devoting themselves to finding, in consultation with all concerned, an alternative method of dealing with the situation by a merger of the Prices and Incomes Board and the Monopolies Commission, however they do it, I am prepared to wait for them to try to produce the result of their endeavours.
If they then come forward with something that enables these powers to be dispensed with, all to the good. But if they come forward with something that does not look convincing, obviously the Government and the House will have to address themselves afresh to a situation which might be of considerable difficulty. But I am prepared to take that on trust for the short time that remains. I hope that my hon. Friends will be prepared to do the same.
That, I think, is the case for what the Government propose to do. I know that it will not carry conviction wholly on this side of the House, and probably none at all on the other. But I suppose that that is the nature of politics today. However convincing a case, however strong it may be, it is still the duty of the Opposition to oppose it. That is what the public outside are sick of. They cannot understand why good things should be opposed on the theoretical, constitutional ground that it is the Opposition's duty to oppose the Government. However, that is not my concern at present.
I believe that the Government have a case. I think that it should be supported, and I shall greatly regret it if at the end of the day the Government do not have a substantial majority of the House behind them.

7.8 p.m.

Sir Edward Brown: Those of us who served on the Committee considering the first Prices and Incomes Act forecast that we should have a series of Orders such as the Order before us. We now have our second, precisely because the dam has burst. The right hon. Member for Sowerby (Mr. Houghton) asked why Part II has to be reactivated. It is because the dam has been breached, leaving the Government

faced with a serious situation, and the possibility that they must take legal sanctions against somebody, though they have refused to do so. As a result of the 1966 Act and its reactivation since industrial relations are now worse than they have been at any time in our history —and that is making quite a statement.
The following workers have passed through the dam very comfortably: the miners, with a 10 per cent. increase; the dustmen, with a 16 per cent. Increase; the exhibition stand fitters, with a 16·3 per cent. increase; and British Leyland clerical staff, with increases of from 8 per cent. to 14·4 per cent. B.E.A. and B.O.A.C. engineering workers had an increase of 30s. a week from 1st September this year. These have not been referred to the Board. There was an agreement which provided for an increase of 15 per cent. for English Clay workers. Motor vehicle retailing and repair workers had a 19·4 per cent. increase, and agricultural workers had a 15s. a week increase. Government industrial workers have had increases of from 3·3 to 12·4 per cent., and local authority manual workers, numbering 680,000. have had increases ranging from 15s. to 37s. a week, which are percentage increases ranging from 5·6 to 12·9 per cent. That is what has happened to the 3½ per cent. norm.
Hon. Members on both sides of the House have never ceased to express their repugnance and disgust with the prices and incomes policy. I think that we should never have had talked about the prices policy but simply about the incomes policy. The Labour Party has condemned its continuance. The T.U.C. has condemned it and union conferences throughout the year have instructed the Labour Party to oppose it in the House. Over many years of toil and sweat we have built up a system of free collective bargaining about which in past years the right hon. Lady has been very eloquent, and it is a sad reflection that today by the order she is doing her best to produce not growth, but chaos in industrial relations.
"Long-term transitional change to a voluntary system" was the expression which she used this afternoon. I should like to quote from some of the statements she has made to show the dilemma in which the Labour Party finds itself.


Speaking at Bolton on 17th September, 1966, on the introduction of the policy the right hon. Lady said:
Economic planning in a democratic Socialist economy cannot operate successfully if wage-fixing is left either to the arbitrary decision of a wage-stop or to the accidents of unco-ordinated sectional bargaining. This sentence was not written 16 days ago but 16 years ago. It was written by a group of left-wing Members of Parliament who outlined in a pamphlet 'Keeping Left' their remedy for the same sort of economic crisis which plagued Britain then as plagues us now.
The members of that group were named by the right hon. Lady and they were the Secretary of State for Social Security, the hon. Member for Poplar (Mr. Mikardo) and the right hon. Lady, among others. They had no doubt that
in a planned society incomes must be planned along with everything else. We called it 'socialisation of the wages sector' and declared that, to make it happen we needed the recognition by the trades union movement that wages in any industry are no longer the business only of employers and the workers in that industry but of the whole nation.'
That is still the issue today…it will call for something much more imaginative than the methods of collective bargaining based on the principle of what the market will bear. But I don't believe we can get Socialism without it.
That is a condemnation of the whole of the policy which is being continued today.
In Election Forum on 10th March, the Prime Minister said:
I don't think you can ever legislate for wage increases, and no Party is setting out to do that…once you have the law prescribing wages I think you're on a very slippery slope. It would be repugnant I think to all Parties in this country. As to the idea of freezing all wage claims, salary claims, I suppose, dividends, rents?… I think this would be monstrously unfair".
He followed this in a broadcast on the B.B.C. programme "24 Hours" on 6th October, 1966, when asked by Mr. Harris:
When the powers of the Act come to an end in August. Prime Minister, won't there have to be a continuation of them?
by saying:
In terms of legislative powers, no…we hope to use the next few months for working out the criteria for voluntary restraint to relate incomes of all kinds, not just wages, to productivity.
One could go on quoting example after example of Ministers denying what would happen but of which we see the results today.
I ask the right hon. Lady to examine Part II and its true function. The right hon. Member for Belper (Mr. George Brown) clearly expressed it when, in Committee in 1966, he said:
What Part II of the Bill does is not to stop anyone negotiating. It does not stop anyone doing what he wants to do at the end of the day. It does not stop anyone settling negotiations. What it does is call upon people to notify what they are proposing, and, if asked to do so, to stand still for a limited period while someone other than themselves, using a set of criteria agreed upon, tests what it is that they are proposing to do. At the end of the day, they are free to go and do it, but they will at least have been called upon to justify it and the country can check, test and judge how far they are taking the national interest into account in what they are doing. That is all that Part II does. It is all that Clause 6 leads into."— [OFFICIAL REPORT, Standing Committee B, 2nd August, 1966; c. 279–80.]
This was the then Minister talking about the voluntary notification and what we have in Part II is a penal sanction applied at the end of it. Hon. Members opposite know it and we know it. The sanction has never been applied and because it has never been applied, claims have gone through without screening and without investigation because Ministers cannot face up to putting anybody in court. The net result is that we have this wretched order pushed through the House year after year. The right hon. Lady and her friends will not only have forfeited the loyalty of hon. Members opposite, who are being dragooned and pushed into the Lobby tonight, or who will be abstaining and sitting on their bottoms, but, and more significantly, she has forfeited the loyalties of millions of trade union workers, who will be saying so in no uncertain fashion when the next Election comes.
Who is kidding whom? The Prime Minister is running around the country making great speeches about the balance of payments while the right hon. Lady is telling the workers that they cannot have any more. But wage claims are still going through and still we see prices rise—and I fully agree with my right hon. Friend the Leader of the Opposition that prices are rising.
The right hon. Lady and her friends should take their scrap of paper away and in its place, in what little time there is left to the Government, they should bring in an industrial relations Bill which


would give the country a sense of purpose, not bring in scraps of paper which have no relevance in our time and our age.

7.16 p.m.

Mr. Eric S. Heffer: My right hon. Friend the Member for Sowerby (Mr. Houghton) made a very good defence of the Government, but I am not certain that he convinced himself by his speech. He certainly did not convince me. There was one interesting point in his speech on which I should like to comment.
He said that we needed this bridging operation, the reactivation of Part II, because we were in an emergency situation—at least, he used the term "emergency"—and said that there was a great danger of a wages and prices explosion. We have had the policy since 1966 and two Bills and an order have continued it. Yet, after two and a half years we are in an emergency situation.
If we are in an emergency situation after two and a half years of the policy, what sort of situation shall we be in in three months' time? I could not follow the logic of my right hon. Friend's argument. If it is an emergency now after two and a half years, how can we get rid of the emergency and make certain that we have an entirely new policy without any powers at the end of the bridging period? My right hon. Friend has revealed that the argument does not have a great deal of content. I say that with due respect to my right hon. Friend whose opinions I greatly value and whom I regard as one of the finest hon. Members in the House.
I should like to say why my hon. Friends and I oppose the order. First, we think that the order is totally unnecessary. Economically, it does not add up to a row of beans. Secondly, we particularly oppose the order at this time because the Labour and trade union movement almost unanimously throughout the country has stated categorically that it does not wish this policy to continue.
It is quite possible that we can ignore the views of the Trades Union Congress. We could ignore the views of the national executive of the Labour Party. We can ignore the decisions of the Labour Party

conference. We can ignore the decision of trade union conference after trade union conference. It is quite possible that we can do this. But my hon. Friends and I are not prepared to ignore the views of workers throughout the country who fought hard to elect a Labour Government in 1964 and in 1966.
My right hon. Friend the Member for Sowerby made a point in a rather different way concerning something which was stated at a meeting which I attended. My right hon. Friend said that the reactivation of Part II was clearly raised during the Budget debate but that at that time no one opposed it. For the benefit of my right hon. Friend, I would say that we were so busy opposing the penal clauses in the other White Paper "In Place of Strife", which was before us that we considered that, at that stage, the reactivation of Part II was a rather minimal matter, because we had to put the whole of our energies to stop the Labour movement being split right down the middle by the so-called White Paper, "In Place of Strife". That was why, at that stage, the question of Part II rather slid in under the door without everybody noticing that this was involved in the package at that moment. We were horrified at what the results of "In Place of Strife" would be.
The matter was not overlooked because in June I made the point at the conference of my union, the A.S.W., that many representations were being made to the Government against the reactivation of Part II. After the Budget speech, when the whole question was again being discussed, time and time again my hon. Friends argued against the reactivation of Part II. It was not, therefore, a question of its being overlooked in the Budget debate. Much more was involved. My hon. Friends and I are opposed to the reintroduction of Part II precisely because not only is it unnecessary, but, as I said at the outset, it is against the wishes and the desires of the trade union and Labour movement.
We have been described in the Press as rebels. In this debate I do not consider myself a rebel at all. If there are any rebels in the party, I would say that they were 21 members of the Cabinet who seem to have forgotten the desires of the Labour movement outside.
What are those desires? A resolution was passed at the Labour Party conference in 1968, not merely saying that it did not want the reintroduction of Part II. It said that it wanted the repeal of the Prices and Incomes Act. That was in 1968. Again, at this year's conference, there were two resolutions, one by Jarrow, which had a different economic strategy—in fact, the economic strategy that my hon. Friends and I have been putting forward consistently for the last three or four years. That resolution was carried. It stated that there should be a genuinely voluntary incomes policy.
In addition, a resolution was passed from the Transport and General Workers' Union which underlined the whole point that we wanted no further legislation that would in any way hamper the trade union position. That meant no statutory powers.
There was a national executive committee meeting this morning. A resolution was put down and was hastily withdrawn. I do not know what went on at the national executive committee, but there was really no need for the national executive even to discuss such a resolution, because the position of the national executive is clearly on record.
Let me quote a letter which has been sent by the General Secretary of the party which is included in the amended version of "Agenda for a Generation", a document which was discussed and passed at the party conference. The letter quotes my hon. Friend the Member for Leicester, North-East (Mr. Bradley), who was speaking on behalf of the Executive Committee. Harry Nicholas, the General Secretary of the party, draws attention to what my hon. Friend said. I quote:
During the week at Brighton there was a number of misunderstandings about the section relating to prices and incomes policy. The National Executive Committee has now considered this document again and feels that it should continue to circulate as a statement of policy approved by the conference. We would, however, draw attention to the fact that Mr. Tom Bradley, M.P., speaking on behalf of the National Executive Committee, said on the subject of incomes policy:
'The resolution talks about "a genuinely voluntary incomes policy". Well, the National Executive Council has no quarrel with that. In our statement, however, we call for in effective incomes policy too. This does not mean—emphatically it does not mean—that we wish to fetter the trade union movement of this country with statutory restrictions'.

That was sent out by the General Secretary of the Labour Party. I know that there have been other quotations from "Agenda for a Generation". The part which I have just read was not quoted, but that is the interpretation of the conference statement concerning incomes.
It has been said that this is a bridging operation. In paragraph 33, page 12, of the White Paper, the word "hopes" is used. This point was put this afternoon to my right hon. Friend the First Secretary, who said that she was in a bit of difficulty about this. She could not say why. She could not give us a categorical assurance that there would not be any powers but said that the Government hoped and believed that there would not be any powers.
The Guardian, in its editorial today, makes the very point concerning this question. The Guardian clearly points out that there are no guarantees whatever. Some of the arguments which I have heard from some of my right hon. and hon. Friends concerning this matter do not give me any confidence that they genuinely believe in a voluntary policy. Some of the arguments which I have heard lead me to the opposite conclusion, that they believe in a statutory incomes policy and in the fixing of incomes in that way. As I said earlier, economically, it does not add up to a row of beans.
I should like to give just two examples of what I mean. This is the Report of the Prices and Incomes Board in July, 1968. Remember, this report came out after the most stringent period when there was a much closer control than there has been since. What did the report, on page 67, say? It said this:
Even so, they are of considerable interest. From the employment/income equation, it appears that incomes policy has on the average reduced the rate of rise by rather less than 1 per cent. in those years when it has been in operation.
That is what it says.
What does the T.U.C.'s "Economic Review 1969" say on precisely this point? It says this:
The implication is that incomes policy has had the effect of restraining the rise in total costs by about one half of one per cent. a year, or about a sixth of what would otherwise have happened.
It goes on to say:
From one point of view it can be argued that this was a small return for the effort which


the Government and the T.U.C. have put into developing incomes policy in the last four years.
I would have said that it was a small return for the agony, the anguish, my hon. Friends and my party have gone through for this policy. It is high time that this policy was dropped, and dropped once and for all.
We are being asked tonight to support an order which, incidentally, is not to be in operation for three months but, clearly, is for one year. That should be remembered. That has not been pointed out in this debate. We are not being asked merely to accept something for three months. At the other end of the three months there may be something of which we do not know. Therefore, we are being asked tonight to vote for continuation, in a modified form, of this policy for one year. That is what it says. [Interruption.] My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) may or may not agree with it. Some of my hon. Friends and I do not agree with it. The T.U.C. does not agree with it. The Labour Party does not agree with it. I am certainly not prepared, and neither are my hon. Friends, to support this in the Lobby.
We have heard a lot this evening about the low-paid workers. There are all sorts of categories of low-paid workers. I will give an example of what a low-paid worker is. Last week a group of building trade operatives, maintenance workers, working in the National Health Service, came to see me here in the House. They came to see me because I am a member of the Amalgamated Society of Woodworkers. They felt that I, as an A.S.W. member, might be able to help them. I got them an interview with the Minister of Health. I myself was amazed when I discovered that for a 40-hour week a highly-skilled joiner who spent seven years learning his trade, who supplies his own tools, was earning £16 8s. 3d. gross pay and, if he was single, was going home after taxation and other stoppages, with £12 a week. Labourers in fact get £1 a week less. I said to those lads, "Why do you stay in that job?". They said, "We like working for the National Health Service. We feel we are doing a good job on hehalf of people less fortunate than

ourselves". What has this policy done to help them?
Remember, these were people who were caught by the builder's penny. Do not talk to me about that, because when I meet building workers in the pubs in Liverpool they tell me what they think about the Government's policy. The people who were caught by the builder's penny were not the people out on the big jobs. The people who were caught by it were those working for the local authorities, those working for the National Health Service—the lowest paid workers in the building industry. Those on the big jobs were able to earn income in other ways. So under this policy the low-paid worker has remained low paid. We have not helped them one bit, and they no longer believe us when we come along with a White Paper and say, "That is in the past. That is all in the past. In future it is going to be different".
They do not believe us any more. I have had telegrams pouring in from the Merseyside area from building workers. Incidentally, I had one from Huyton, Kirkby, and District Trades Council[Laughter.]—and I also had one from the Huyton branch of the Amalgamated Society of Woodworkers. I can understand that, because I am a member of that branch. But the telegrams have poured in, and they have said, "Stand firm, and fight against the reactivisation of Part II". They are not doing that because they do not understand it. They understand it because of the builder's penny very well indeed. They are sophisticated to the extent that they have been on the receiving end of the policy.
Of course, we have been told that we need the policy to deal with prices. Well, I should like them to see a list of the prices we have actually controlled. Of price increases notified, 18 per cent. have been held back, but that means that 82 per cent. have not been held back. That is a very simple calculation, but it is true. Those who have been getting increases in their rents, those who have been getting increases continually in that direction, and other directions, are not very enthusiastic about the operation of this policy.
As far as we are concerned, we are not going into the Lobby—I am not, anyway, and I am sure that many of my hon.


Friends are not—with hon. Gentlemen on the other side. I will tell why —for the reasons that my right hon. Friend the Member for Sowerby (Mr. Houghton) made clear: the Opposition are irrelevant; they are only involved in opposing this policy in the way they are, purely for party political game. [HON. MEMBERS: "That is not fair."] That is why we are not going to play. I say openly, that we hope that tonight the Government will lose by our people abstaining, but we are not going to help the Conservatives in the way they wish us to, for the reasons they want us to. We are fighting our own battle in our own way on our own ground, and it is not the ground of hon. and right hon. Members opposite. But we could not accept this policy.
I am going to conclude with a quotation from Nye Bevan. In his book, "In Place of Fear", about political leadership, Nye Bevan said this:
The first function of a political leader is advocacy. It is he who must articulate the wants, the frustrations and the aspirations of the masses. Their hearts must be moved by his words, and so his words must be attuned to their loyalties. If he speaks in the old false categories they listen art first and nod their heads, for they hear a familiar echo from the past. But, if he persists, they begin to appreciate that he is no longer with them. He is not their representative any longer in the true meaning of that much abused term.
The workers are hearing an echo from the past, and the great promises that were held out by the co-called incomes policy. They have not been fulfilled in the terms in which Nye Bevan spoke. So the Government are no longer giving them the leadership they want on this question, and I hope that my right hon. Friends will drop this policy, and drop it now.

7.40 p.m.

Mr. Richard Wainwright: The hon. Member for Liverpool, Walton (Mr. Heffer) has explained that he will not be in the Opposition Lobby tonight because he refuses to keep company with the hon. Members who will be in that Lobby. Liberal Members of Parliament have almost nightly experience of this dilemma as to whose company they shall keep in the Lobby, and from time to time it causes us revulsion. I point out to the hon. Member for Walton that we shall not be voting tonight on a Conservative Motion

—there is no question of being associated with the Conservatives in support of any verbiage of theirs—but on a straightforward Government proposition, and I do not understand why he should feel so sensitive about going into the Opposition Lobby.
The hon. Member for Walton also said, quite correctly, that the order for which the Secretary of State seeks approval is expressed to last throughout the whole of 1970. But Section 20 of the Prices and Incomes Act, 1966, which the order reactivates, expressly empowers the Secretary of State to vary or revoke by a subsequent order any previous order she has made. Since the duration of these powers is an important matter, we should be told the Secretary of State's intentions. Does she intend to revoke or supplant the order when the Commission for Industry and Manpower and the other new machinery gets off the ground?
The most depressing aspect of the debate has been the incredible coyness of the Government about the "promised land" of the C.I.M. The Government's only possible tactics for establishing unity behind them and below the Gangway would have been to explain in detail how worth while the C.I.M. will be and how justified will be the trek through the desert for three or four months to reach it.
But there has been an extraordinary silence, for which the Secretary of State gave an unconvincing explanation, about what is to follow as to prices and incomes and pay bargaining in about four months' time. For the House to be left in such ignorance brings Parliament into disrepute among our fellow citizens, who do not expect the House of Commons to live and work from hand to mouth. They expect hon. Members to be given an idea of future strategy, at least for a few months ahead. It is humiliating for Members of Parliament to have to report to their constituencies that both Government and Opposition parties came away from the House absolutely in the dark about the future for April or May next year.
The order takes us back for nearly three and a half years to the Prices and Incomes Bill, Mark I, in the form in which it received a Second Reading in the House, before the Measures of 20th


July, 1966. After three and a half years of turbulent and intense experience of prices and incomes legislation, we are being asked to go back to what was at that time excusable as a hasty attempt to fill the empty armoury on this subject left by the outgoing Conservative Government.
One of the incidental benefits of prices and incomes legislation has been the remarkable amount of information on pay and pay bargaining which has been uncovered by the N.B.P.I. We have at least a sum of knowledge to the credit of the policy, yet that knowledge is not being used to adapt incomes legislation for the ensuing, and in the Government's eyes very important, few months ahead. We are simply being taken back to the earliest version of the Government's incomes legislation.
The Government do not appear to have learnt that the statutory restraint of pay is most damaging to the delicate plant of consent, and that for every month during which compulsory statutory powers continue to exist the possibility of general consent for a voluntary policy will be correspondingly lessened.
When the Government speak of the invaluable effect of educating public opinion about pay claims and their effects, they overlook the fact that prices and incomes legislation not only acts as an amplifier to get across to the public some of the useful lessons which have been learnt, but also amplifies to the public all the clangers that are dropped on this subject. Every time an extortionate advance either in prices or wages is secured, against the interests of the community, by a strong group which can apply pressure—and there have been many in the last few months—the news is amplified loudly to the interested public.

Mr. J. Bruce-Gardyne: The hon. Member has referred to the effect on opinion at home of the advances that get through. Would not he agree that the effect is even more dramatic on opinion abroad? At a time when the Government were trying to wrestle with an unprecedented deficit, every time the so-called norm was exceeded, people abroad assumed that the worst had happened and that the flood gates had been opened.

Mr. Wainwright: I am more concerned with the education of public opinion at home, on which I think a body such as the N.B.P.I. could do a good job if it were allowed to work in a proper context.
It is humiliating to have to revert to the earliest and most primitive version of prices and incomes legislation. There is an attempt to cover this up by posing, in paragraph 10 of the White Paper, two quite unreal and invalid alternatives. The White Paper tells us that we are faced with a choice between only two alternative approaches:
On the one hand we can choose to plan the rise in incomes so that it does not endanger exports and the investment on which productivity, high real earnings and a high level of employment depend. On the other, we can claim the right to extort whatever increases in incomes we can get individually regardless of the consequences.
Those are two unreal alternatives. The history of the last three years has shown that the Government cannot plan rises in incomes; they can go only by guess and by God and hope to get somewhere near the mark, but have rarely done so.
The other alternative is equally unreal. There is no question of going back to a complete free-for-all, a complete jungle in which devil takes the hindmost and everybody struggles for the utmost that they can get. This is just not on.
There is another way open, which my hon. Friends and I would describe in this way. We can build with Government help an effective and up-to-date set of structures for pay negotiation, within which the parties can be left to bargain freely. The structure would contain restraint for those groups who have special monopoly power in any part of the market for goods and labour, and it would contain official support for those groups which are inadequately organised and which over the years have been quite unable to stick up effectively for themselves.
This would require, first, the extension of the Restrictive Trade Practices Act to the trade unions, who would be called upon to vindicate to the Monopolies Commission, or its equivalent, their position in the labour market. Any groups which were likely to be able to exert the kind of extortionate pressure to which the White Paper refers would be subject


to the vigilance of the Monopolies Commission. I wish that was the Government's view, but, alas, it is not.
Secondly, there should, in our view, be something more needed for the low paid than simply assistance in negotiations. It is high time that the adult able-bodied low-paid worker had a statutory minimum earnings level. We are not convinced, either by the Report of the National Board for Prices and Incomes or by the Government's comment upon it, that this is either impossible or enormously costly. Indeed, the White Paper acknowledges that the problem of the low paid is not as difficult as had at one time been thought. The White Paper acknowledges that most of the low paid are scattered throughout industry in which very often other pay levels are quite high. This makes it easier to apply minimum earnings than if some of our great industries had a huge concentration of low paid people, where a sudden jerk in the minimum legal earnings would cause industrial dislocation. The discovery that the low paid are scattered pretty well throughout British industry is a bull point for a minimum earnings policy.
It will be necessary for the Government to take some lead in preparing the way for a more extensive use of local and plant settlements, particularly by providing for elected works councils in all substantial work places. This is the way to censor undue sectional claims. There could be no healthier discipline in any large works for dealing with any undue sectional pay claim than for it to go through the mill of an elected works council representing all the other sections of employment in that works.
Lastly, on the prices side, we believe that any board charged with seeking information about prices and trying to do something about them should have substantial powers for recommending tariff reductions. No threat to anybody trying to profiteer, to get an extravagant margin, can compare in strength with the threat that they may be exposed to a lot of foreign competition. We regret that this Government have been unwilling to use the threat of tariff reduction against the very people whom they often accuse —perhaps rightly—of making extortionate prices in a difficult economic situation.
We find it difficult to understand the reason for this reversion to a primitive form of incomes policy at this time, particularly as we are not told where it is to lead and what is to happen next. For lack of any other information, our guess is that the order is intended, either by the Department or possibly by Ministers themselves, to make sure that after the election is over, after the voting has been done, there remains machinery for reviving in its full austerity the prices and incomes standstill.

7.54 p.m.

Mr. Raphael Tuck: So the declaration of intent signed by my right hon. Friend the Member for Belper (Mr. George Brown) and by both sides of industry, management and workers, was all hypocrisy? Was it nothing but high-sounding phrases—merely a facade? I do not believe that it was. I believe that, at least on our side, it was real and sincere. We recognised then, and many of us recognise now, that we must have a prices and incomes policy to prevent the fatal spiral which goes on, and has gone on for years now, with disastrous consequences for the lower paid workers, for those with fixed incomes, for pensioners and others in that category, besides having a serious effect upon our balance of payments and making us unable to pay our way.
I have come here from a sick-bed to plead with my hon. Friends, whose views I know and respect though I disagree with them, not to do something tonight for which they may be sorry for the rest of their lives. I am asking them to think again.
My hon. Friends the Members for Birmingham, All Saints (Mr. Walden) and for Liverpool, Walton (Mr. Heller), who are not here now, placed reliance upon a voluntary incomes policy. Of course, we should like to see a voluntary incomes policy. We tried a voluntary incomes policy, but the stark fact remains that it did not work. It did not work because—I say this with great regret—people were more concerned with personal short term gains than the long term interests of the nation.
Wages and prices rose. We did not want them to rise. I would remind my hon. Friends that wages rose faster than prices. Indeed, the right hon. Gentleman


the Leader of the Opposition acknowledged tonight that wages rose faster than prices, but both rose. The ethos of our community could thus be summed up in the two words, "I want". There appears to be no concern whatsoever for the welfare of the community.
The reason why the Government had to impose compulsory features was that a voluntary system did not work. It is no use blaming the Government or my right hon. Friend the First Secretary of State. If any one feels for the unions, she does. She has been trying to ride the two horses of prices and incomes and to hold them back for all she is worth during the time that she has been in office. She has been doing it to the best of her ability. She succeeded to a certain extent, but those horses have proved too strong for her. I wish that there were 12 Barbara Castles in the Government.
My hon. Friends must surely realise that unless we have a prices and incomes policy we are doomed. We are now, at last, paying our way. This in no small measure is due to our prices and incomes policy. Of course it is due to financial Measures, but it is also due to our prices and incomes policy.
I appreciate that we have not had the success that we wanted. I should have liked to see a complete freeze. Prices have risen, but not as much as they would have risen had we not achieved a prices and incomes policy.
We have been told, and the figures have shown, that often we have not done what we should have done. I do not agree with the removal of the ceiling on dividends. That was entirely wrong. But the Government are not paragons of virtue. They have not always been right. However, unless restraint is practised, we shall lose all the advantages that we have most painfully gained in the past few years.
I am sure that the Labour Party is genuinely concerned for the unions. The Tories are not. They say that they are concerned. They have been weeping crocodile tears and saying that the unions are not getting as much as they should, that we are stopping them from collective bargaining and reaping the rewards that they should reap.
Yet, in Watford last week, the hon. Member for Worcester (Mr. Peter Walker) said:
One cannot help but be worried by the industrial disputes and the way wage increases are now being given. Prices will soar next year as a result…and the Government may gamble on an Election in spring before this increase. The Conservatives would bring in trade union reform.
He is against the increases and the way that they have been given to the workers. He will bring in trade union reform. If —heaven forbid!—the Tories ever came back there would be a holocaust. Prices and directors' salaries would soar; wages would be frozen. The hon. Member for Bath (Sir E. Brown) proved that this evening. He said, "I do not want a prices policy but I want an incomes policy." Of course the Tories want an incomes policy. They want prices to soar, in a free-for-all, and directors' salaries to soar—

Mr. John Page: I am not the hon. Member for Bath, but I can assure the hon. Gentleman that that is not what he said. He said that he thought the whole of the prices and incomes policy was stupid, but that the prices part of it was most stupid.

Mr. Tuck: I stand corrected, if the hon. Member is right, but I am sure that I heard him say that he was not against a prices policy but was against an incomes policy. We shall be able to read what he said in HANSARD tomorrow and if I am wrong I apologise.
I say that under a Conservative Government prices would soar, directors' salaries would soar, and wages would be frozen. We can remember the days when the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) was in office. He froze wages, but prices and dividends went sky high.
The Tories have promised trade legislation in "Fair Deal At Work". I warn my hon. Friends that that sort of fair deal at work will be child's play if the Tories get back. It is nothing more than a smoke-screen. There will be harsh, repressive legislation—as harsh as the Trade Disputes Act 1927, or even the legislation such as exists in Greece today, making strikes illegal. I would not be surprised at that. My hon. Friends should realise that this is what they are asking for if


they vote against the Government tonight. I beg them, for the sake of the country and for the sake of the unions whose interests they represent, to think again.

8.3 p.m.

Mr. Kenneth Lewis: This is a continuing debate that goes back for many years. Those who have been involved in it may imagine that it is never-ending. There have been debates on prices and incomes policies not merely in this Parliament, under this Goverment, but—under other titles—in other Parliaments, under other Governments. I have always taken the view that a Government, of whatever complexion, must settle with the fact that if they want growth and seek specifically to run the economy at as high a level as possible, while maintaining very high employment, at some time or other they must put on the brakes. We can call this a prices and incomes policy or something else, but that is what has to be done. It may be done compulsorily or voluntarily. In this Parliament we have now seen it working at both the compulsory and voluntary level.
During the nights in Committee upstairs when we discussed the first Bill I repeatedly expressed the view that a compulsory prices and incomes policy was not acceptable—that it could not be implemented. I said that a voluntary prices and incomes policy was desirable. I now take quite the opposite view. I have come to the conclusion that we cannot have a voluntary policy, despite what hon. Members opposite say. The hon. Member for Liverpool, Walton (Mr. Heller) and the hon. Member for Leicester, North-East (Mr. Bradley) have said that they believe that the trade union movement would support a voluntary incomes policy. Yet the trade unions have not given any indication that they will support a voluntary policy for dealing with strikes.
I suggest that the policy as put forward by the right hon. Lady the Chief Secretary this afternoon, when she asked for our support for the proposal before the House, is in reality a voluntary one. Does the hon. Member for Walton or any of his hon. Friends really think that the right hon. Lady will use the sanctions behind this order? My hon. Friend the Member for Bath (Sir E. Brown) put this question directly to the hon. Lady, and she gave no indication that she would use the sanctions behind the order. She

might just as well have said to the Parliamentary Labour Party upstairs: "You can pass this order tonight. You have no worries, because I shall not bring in the compulsion that stands behind it." Hon. Members opposite know that this is so. The hon. Member for Birmingham, All Saints (Mr. Walden)—who made a brilliant speech—has said that for the first time he will not vote with the Government. I am in the position of having to say that for almost the first time on prices and incomes—not quite the first—I shall vote with my hon. and right hon. Friends on this matter because I do not believe that this policy is any longer tenable.
I cannot understand why so much fuss is being made about it by hon. Members below the Gangway opposite. They must realise that the policy is a pure charade. The White Paper indicates that it is a charade. Whether it has any value as a public relations exercise I do not know but I am certain that at no time within the next few months will the right hon. Lady try to bring this policy into effect on the wages front.

Mr. Eddie Griffiths (Sheffield, Bright-side): The hon. Gentleman describes this order as trivial, and a charade. Yet, as I understand it, the Opposition have put out a three-line Whip this evening, although on issues such as Vietnam and Biafra the Opposition have officially abstained.

Mr. Lewis: I do not think that that is relevant. There is a good reason for a three-line Whip in this case. There is no particular reason why the Opposition should support anything that has become a nonsense.
It has become a nonsense because of the Government themselves. There are at least two reasons why this policy is not any longer acceptable. First, the right hon. Lady gave in to the trade unions on "In Place of Strife". She thus made it impossible for herself to persuade the unions to accept any proposals that she would ever bring forward again on prices and incomes. They knew that she had been defeated. I do not blame the right hon. Lady entirely for that defeat. The Prime Minister was partly responsible, as were other members of the Cabinet. I believe that the right hon. Lady wanted to take a tough line with the unions when


she was putting her proposals to the House in connection with "In Place of Strife". She was defeated in the Cabinet.
Having been defeated on that issue she is not now in a position—whatever happens about the order tonight—to restrain any of the large unions in the next few months. She cannot do it, and she will not do it.
The second reason why this policy is no longer tenable is that there have been so many rises in wages in the last few months that go beyond the 4½ per cent. limit that it makes the whole policy a nonsense right from the start.
I know that the right hon. Lady said, as have other hon. Members, that these rises have gone to the lower-paid workers. Any excuse for a settlement which has shot through the incomes policy is better than none. However, let us consider the people who have received rises in the last few months.
Post Office engineers received 7 per cent., and they are not particularly lower-paid workers. People employed in the exhibition industry received a 16 per cent. increase, and they are among the highest paid of workers. London firemen received 17 per cent., and they certainly cannot be included among lower-paid workers. Coal-mining surface workers, on the other hand, are among the lower paid, but when one considers the building industry, apart from certain sections of it where there is a small number of lower-paid workers, those employed in it are pretty highly paid. They all benefited.
The increases which have gone well beyond the norm are not related to the lower-paid workers. If anyone suggested that lower-paid workers were to receive increases in the next few weeks, what would happen? Hon. Members know that some of the greatest capitalists in society seeking increases, without regard to the lower-paid workers, are the big unions. They are always concerned with maintaining differentials. As soon as a lower-paid worker is given a rise in order to bring him nearer his higher-paid brethren, a request comes from the union concerned asking that the differential should be maintained.
I do not believe that the prices and incomes policy as represented by this order can be accepted by anyone as

realistic. It is an attempt to put a public relations gloss on a policy which the Government started many years ago and have kept on too long. In our first debate on a Prices and Incomes Bill, I said that I thought that such a policy could run for a minimum length of time and that, if it went on too long, it would run into the sand. This has gone on much longer than anyone anticipated.
I accept that it worked when the hardest part of the policy was in operation and we had the squeeze. There was then, I believe, a marginal effect on wages. But we have heard no mention of the fact that the people who have maintained the prices and incomes policy most of all are the employers. The voluntary restrictions on dividends can remain voluntary because no one has attempted to break through on this front. Almost every commercial and industrial concern has supported the Government by dividend restraint. Their reward has been a knock from the Chancellor of the Exchequer in every Budget. They have been squeezed at the banks. They have been restricted in their credit. They have been told that their investment allowances were to stop and that the Government were providing investment grants as the Government saw fit. All that has happened to industry as a result of supporting the Government is that, as the months have gone by, it has been beaten more and more by the biggest stick that the Government could find.
The Government do not really wish to keep down prices. It would be a tragedy for the Chancellor if they did. That would lead to rampaging inflation, as everyone knows. The Government say that they are setting up a procedure to vet prices and that there can be a 30-day standstill. At the same time, they have the selective employment tax, which is putting up the very prices which the right hon. Lady is trying to cut back. She challenged my hon. Friend on the value-added tax, but there is no more diabolical tax on the cost of living than the selective employment tax.
In many ways, I am very sad to see that this policy apparently has not provided any credibility. I still think that we have to try again in the future. I am certain that no Government can allow a situation to arise where those


who are most powerful, be they in industry or in the unions, take the swag while the rest lag behind. I would not give up the attempt, but I would say to hon. Gentlemen below the Gangway that, if they really believe in a voluntary incomes policy, it is they who must educate their friends in the trade union movement to realise that. Inasmuch as the unions are involved with the Government and industry in running our economy, they cannot opt out.
In a few weeks from now, the right hon. Lady is to bring in her Industrial Relations Bill. That will provide a host of advantages for the unions. I understand that she will ask of them no obligations. It is impossible to get employer co-operation on that basis. The best advice that I can give her is to take a leaf out of our policy. She must re-strengthen her Ministry which, through no fault of her own, has been weakened under her direction. It must be provided with the kind of influence that it used to have before the Prime Minister and other Ministers in the Cabinet interfered. Above all, when the right hon. Lady brings forward her Bill, she must recognise what my right hon. and hon. Friends have recognised for some time. If the trade unions are to be given advantages, we must ask of them certain obligations.
Some of us believe that the trade unions will not be ready to accept those obligations. That is why we have to make sure that the law is made such that those obligations are written into it.

8.19 p.m.

Mr. Norman Atkinson: The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) is a unique animal among hon. Members opposite. It is obvious why he holds the position that he holds. He speaks of trade unions being given "advantages", but he should recognise that trade unions were formed, and developed in the way that they have developed, because workers exist in a generally hostile society. For the hon. Gentleman to talk about advantages is to get the matter out of perspective.
Similarly, what basis is there for the arrogant assumption that some workers are taking more than their share and are exploiting their bargaining position? The hon. Gentleman is as bad as the hon.

Member for Bath (Sir E. Brown), who accused my right hon. Friend of lacking the guts to take the dustmen, the teachers and the nurses to court. It is asserted that the policy has failed because there has not been a long string of workers appearing in court. This is all based on the assumption that workers either are responsible for increased prices or are taking from society something to which they are not entitled.
My right hon. Friend the First Secretary of State spoke about the creation of the new Commission. I hope that my right hon. Friend the Chancellor will be most explicit and tell us on what date it is expected that the Commission will be established. I guess that the legislation will be through by about July, on which basis we can expect that the Commission will be set up during the Summer Recess. On such an assumption, at least we shall know the length of the bridge. At that time we shall have some understanding of the Commission's purpose and its likely constituent parts. When it is established, we shall understand what possibilities there are of its undertaking the jobs which have been undertaken by Mr. George Woodock.
It is not often that the House has the chance to debate an issue on which hon. Members are divided according to the class interests they represent. It has been demonstrated today that there is a class difference between the two sides, and to some extent there is a difference between hon. Members on this side, arising from the origin of the interests which hon. Members represent. Underlying all comments of hon. Members opposite is the fact that they represent the interests of banks, financial interests generally, traders, manufacturers, and so on.
Therefore, it is not surprising that the argument of hon. Members opposite against the continuation of these powers arises from their hatred of any intervention in the pricing system. Their objections have nothing to do with the control of wages. Their objection to the order and to the continuation of the policy is not that the Government should not be taking these powers to intervene in the fixing of wages.
It is no accident that those of us on this side belong to a party which is called the "Labour" Party and that many of


us are active in trade unions. It is logical for us to take a stand against any intervention in the fixing of wages and right that we should argue for intervention in the price-fixing mechanism. We argue the case for free wage bargaining and for there being price restraint controlled by Government. We believe, in other words, in price restraint and free wage bargaining.
Many hon. Members may suggest that this is illogical, but events in the last three or four months have proved the opposite. There is now ample evidence that wages by themselves are by no means responsible for price increases. The latest figures suggest that wages represent about 1½ per cent. of the price increases which occurred last year.

Mr. Dudley Smith: The big increase occurred through devaluation and other measures such as S.E.T.

Mr. Atkinson: This is where I part company from those of my colleagues, notably my hon. Friend the Member for Birmingham, All Saints (Mr. Walden), who argue that monetary methods should be used to manage the economy. The only people who suffer from the use of such methods are workers generally and lower-paid workers in particular.
I want to deal with the argument that free collective bargaining in wages between management and workers can operate at the same time as free price ceilings operate. My right hon. Friend the Secretary of State presented her case ably. She undoubtedly speaks as a Socialist, but unfortunately her conclusions are orthodox Conservative conclusions, often expressed by many of the theorists supported by hon. Members opposite. We have to argue our case against that background.
We do not oppose the order because the policy failed in some degree during the last few months in that it was not as effective as it should have been. We oppose the order because the policy is wrong in principle. We oppose the principle of the policy stated by my right hon. Friend this afternoon. This is the position which my hon. Friends and I have taken over the whole of this year.

Mr. Heffer: For three years.

Mr. Atkinson: This year particularly, in opposing the part of the policy spelled out in the White Paper.
This policy may be a reasonable method of demand management from the point of view of those who advocate its implementation, but I return to the question of principle. We are arguing for a much faster rate of growth and for the creation of additional wealth. Beyond that, we are arguing for a much more equitable distribution of the additional wealth produced. That is the second reason why we oppose this policy in principle. It cannot fulfil that purpose. In fact, the opposite is the case.
I take up the assumption by hon. Members on both sides of the House that somehow or other a fixed global amount should be distributed throughout the country for all wage earners. We challenge that very concept. We are not talking about having a fixed global amount for wages and trying to get some sort of equitable distribution within that amount. That is not our purpose. Our job is to take more for the workers' share. It is therefore not an argument about trying to get an equitable distribution between one group of workers and another. The real issue is getting a transfer of wealth, and therefore enlarging the amount which is available for workers generally.
If we look at what has happened in society in recent years, and certainly in the post-war years, we see that the rich have become measurably richer. The difference between rich and poor becomes more marked as inflation accelerates, because, by the very nature of capitalism, that must happen. Inflation itself is against the interests of workers. It is helpful to those who derive their income from unearned sources.
The reason why inflation is advantageous to the people represented by hon. Gentlemen opposite is that periodically those who own property can reassess the value of it. As inflation pushes up prices and values generally, the people represented by hon. Gentlemen opposite reassess the value of their property and their interests, and in that way they have given themselves a bonanza in the post-war years. Their wealth has increased as inflation has increased.
Those who own property are able adequately to protect themselves against inflation. The worker who has to spend his wages weekly, and does not own property, is unable to make any effort to offset the effects of inflation. The burden of it therefore falls upon the wage earner. He bears the brunt of this inflationary process. This has been part of the whole business of the rich getting richer, and this is why we argue for the redistribution of wealth, for enlarging the amount that is available for wages.
One further reason why we condemn the policy suggested in the reactivation of Part II is that it operates against the redistribution of wealth. It is designed to maintain the existing share differential between wages and income from other sources. We oppose this principle because it is wrong politically.
In trying to pursue some sort of interventionist policy in the price system the Government have failed for many reasons. One of the most important is that they were warned off the course by the CBI., by the City, and by various other interests. They were warned not to interfere in the price system. They were threatened with dire consequences if they did not heed that advice.
This is where Mr. Allen of U.S.D.A.W. is correct in saying that we cannot accept the policy if we are concerned about lower-paid workers—and let us consider his shop workers as being lower paid. Yet it is not possible to increase the wages of shop workers unless the Government are prepared to assist. When shopworkers' wages are increased, it is necessary for the Government to intervene to stop the price of goods from being increased at the same time, and to do this they must challenge property
As part of the whole process of the redistribution of wealth the Government must take direct action against property and commercial interests. They must take action against those who own and control the rents of the shops in the High Street, because this is the only way of putting up shopworkers' wages whilst avoiding price increases at the same time. Therefore, it is part of our argument that the Government should intervene in the whole business of property rent and not leave their intervention at council housing and the rest. They should start to

intervene in the City and with those who own property and who have gained great wealth from the ownership of property since the end of the war. Whatever statistics are examined, adequate proof is there that the greatest contributory factor to our inflationary process since the end of the war has been the price or rent of property. We have to look at this in order to pursue the argument for the redistribution of wealth which the Government claim is part of their policy.
I take another argument used by the Government and by right hon. and hon. Members opposite. This is—on the whole question of control of wages and having a global amount—that many of the workers in the motor industry have exploited their bargaining power. But large sections of them have only kept pace with the cost of living over the last thirty years. There are people in the industry who are actually worse off than they were 30 years ago. I think that there is now suffiicent on the record to prove the point.
The workers in Fords particularly—an American employer—are only just keeping pace with the cost of living and therefore could not in any circumstances be accused of exploiting their bargaining position, for they are taking no more from the economy than they were 30 years ago. [HON. MEMBERS: "Nonsense."] The record is there for all to see. The facts are not challenged by the Government and they are in possession of the evidence I have submitted to them. One could go throughout much of the industry on this theme and refute the argument that trade unions have used their bargaining power to take from the economy more than that to which their workers are entitled. It is nonsense to, argue otherwise.
It is also evidence in support of our case that it is possible to negotiate wage increases against price ceilings, which is. part of the case for redistribution of wealth. It is possible to have free wage bargaining without pushing up prices, and, again in the motor industry, I quote the example of Rootes. Large increases were negotiated on behalf of Rootes workers which have not been reflected in, the prices now being charged for their products. The firm has been able to do this successfully.
There is thus the possibility of negotiating wages in this way so that the employer must concede wage advances at the expense of something else. It could well be at the expense of undistributed dividends or by having to increase capacity in order to produce that much more to pay for the increases conceded. But that is all part of the redistributive process and it is part of the argument for our case.
But there are also many differentials which are not clearly seen when we talk about the lower levels. There are lower-paid workers in the car industry and there is injustice in the industry. In the new year, Ford workers will be trying to negotiate increases of up to £10 or £11 a week. They have made the application and the employers are to reply on 24th January, when they will make an offer. It is expected that their offer to begin with will be £5 or £6 a week. But the workers will reject it as derisory, for they are asking for double that amount. It will be the first major test of the policy which we have heard argued.

Mr. Terence L. Higgins: What will that be in percentage terms?

Mr. Atkinson: It could be up to 31 or 32 per cent., because Ford workers are arguing for parity with Rootes workers. Output and productivity at Ford are far higher per man than at Rootes or the British Leyland organisation. Ford workers have the best productivity figures anywhere in the motor industry, yet they are the lowest paid. They have a good case for parity with the Midlands. The average Ford wage is about £22 10s. a week at the moment, compared with the Rootes average and the average in the Midlands of £34. That gives some idea of the amounts of money being considered.
On every count, there is absolute justification for that increase. In relation to car workers generally, Ford workers are under-paid and low-paid. Whatever element there is in the policy for low-paid workers, the workers at Ford must on any standard be included in that category, and the Government ought to assist the process of lifting their rates up to those obtainable elsewhere in the industry. Whatever analysis be made of the car industry, Ford workers are entitled to the same sort of wages as obtain in

in the Midlands, wages which have been gained as a result of piece-work conditions and so forth in that part of the country.
In putting our case as we do today, we are not just arguing that the policy has failed, that it has not been applied, that it has some weaknesses or contradictions. That is not our case. Our case is that it is wrong in principle. The policy is designed to shore up an economic strategy with which we basically disagree. The issues of the rate of growth and the redistributive element in our economy are fundamental issues for us, and we reject the whole business of wage restraint because it is against the interests of those whom we represent. That is our basic position. It is a political opposition. We are not talking about the maladministration of a policy or fag-ends of argument of that kind. We are talking about fundamental principles. Because we have that basic objecting to the principles being taken on board by a Labour Government, we are resolute in our opposition to the policy.

8.43 p.m.

Mr. John Page: I have heard every speech in the debate. The thread running through all of them has been the question: why have the Government presented this order for approval? The most interesting speech came from the right hon. Gentleman the Member for Sowerby (Mr. Houghton), who bravely, and with magnanimity, after his victory over the Government earlier in the summer, tried to support his right hon. Friend the First Secretary of State and her right hon. Friends. After pushing his way through arguments which he presented with little confidence, the right hon. Gentleman showed a sudden spark of fire at the end of his speech when he said that the reason his hon. Friends must support the Government today is that, if they were forced to withdraw the order and Part II of the Act lapsed, it would be a disastrous political defeat for the Government and would take all credibility from them.
In that speech a most distinguished figure in the Parliamentary Labour Party gave party politics as his reason for supporting the Government. The right hon. Lady's attitude to the prices and incomes policy seems to be like that of an obsessive punter who bought a list of tips


on going to a race meeting. Incidentally, I think that she must have bought them from her right hon. Friend the Member for Sowerby at the T.U.C. conference in 1955. She has backed a horse that has been tipped in each race and each time it has been a loser. Now, clutching her lucky rabbit's foot or whatever, she is plunging for the last time on the list of horses. I fear that this too is likely to be another loser.
Who are the Government trying to impress by introducing this order and giving another 12 months' life to Part II. Is it the trade unions? In her speech the right hon. Lady said that in passing the order tonight the Government would have the support of the whole trade union movement—a remark not received with universal acclamation by her hon. Friends. This order is anathema to the trade unions. Is she doing it to improve her relations with the employers? The answer is is "No". They do not want the order, because they know that the whole of their industrial relations over the last few years have been bedevilled by the Government's prices and incomes policy. It has made negotiations at factory level, and the general atmosphere in industrial relations, very much worse.
Could it he that the Government are trying to impress the International Monetary Fund? I do not believe that this was a good runner earlier in the year when it was given as one of the reasons why Labour backbenchers should support the Government. It was said that a commitment had been given to the I.M.F. but I do not believe it was, and it cannot be considered significant now. Is it an appeal over the heads of all parts of industry and the international financial world to the general public? Is it something which the public wants even though politicians do not? Is this another of those
…unpopular things we are doing because we know it is right even though people do not understand it"?
This does not stand up either. I looked through the list of items on the opinion polls recently. The nearest I could get to this affair would be the attitude towards strikes.
About six weeks ago, 53 per cent. favoured legislation and only 28 per cent. were satisfied with the new T.U.C. intervention plan. It is interesting how in

every instance that has come before the country in the last six months the Government have gone out of their way to oppose public opinion. It must be a kind of a death wish.
I did not pick out these items selectively. I picked them out as they came in the list of Gallup Poll summaries in the Library. They showed that 84 per cent. of the public were against hanging; the public was against the two-tier post; against the trade ban on Rhodesia and against entry to the Common Market. My point is that this is another example of the Government going against public opinion for no apparent reason. We must decide why.
I think that the answer is contained in the famour paragraph 33 of the new White Paper—a White Paper of inordinate length with very little meat. That paragraph says:
The Government hopes that it will not be necessary to perpetuate these delaying powers in the legislation to set up the C.I.M.
The Government have not given any undertaking today that statutory powers will not be introduced in the new legislation. Part II is being kept alive and will be kept alive through the summer until, during the June-July "sunny" period when, with a view to an October election, the unpleasant powers contained in the order will be dropped. An innocent and friendly industrial relations Bill, full of "goodies", will then be introduced.
Then, in the unlikely event of the Labour Party winning the next election, the Government could soon afterwards come back again with new and stronger statutory powers. They would then use as the basis of their argument, "We kept Part II and warned in paragraph 33 that that might be done". That, I think, is the reason.
There are figures which prove no benefit whatever can come out of the order. I remind my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), who said that the powers had not been used recently, that less than 10 days ago a standstill was imposed on the new claim of the National Union of Bank Employees. That standstill can last for about the next three months, admittedly as a maximum. The powers were used recently, and against a union which is


not very popular with the Government and not very strong.
There must be a moral to all this. It is no use my trying to point the moral to the Government Front Bench, but I hope that it will be taken up by my own Front Bench. The moral to be learnt from this prices and incomes dispute is that once one starts on the slippery slope of a prices and incomes policy, one eventually becomes entangled in its statutory effects.
If the Government continue to be a large employer with ultimate responsibility for nationalised industries and pay in hospitals and so on, the next Conservative Government will be under pressure to do something about it.
The answer is for my right hon. and hon. Friends, as soon as they next take office, to begin a strong process of denationalisation in order to avoid slipping into the trap. Once they have divested themselves of responsibility for a large number of employees for whom they are now ultimately responsible, they can then become good employers and pay the teachers and the nurses what they deserve. They will then cease to be the worst employer in almost every respect.

8.55 p.m.

Mr. Alexander W. Lyon: I come to this debate rather as Mark Anthony in "Julius Caesar" came to the Forum. I come anxious and willing to embrace an old friend in the compulsory prices and incomes policy and I find that he has been done to death, and as I stand mourning his death I find that, around, the murderers are wiping their daggers on the white shroud of the White Paper in which the body has been lain.
There is no question but that the compulsory prices and incomes policy is dead; we have finished with it; and I far one bemoan the fact. I am alone with my hon. Friend the Member for Bosworth (Mr. Wyatt) and one or two other hon. Members in bemoaning the fact. But I say it frankly, and I do not think that there is any point in pretending otherwise.
I therefore come straight to the point which is put to me by some of those hon. Members who for so long have sought to bring about the death of this old friend,

and in particular to the noble Brutus himself, for if my hon. Friend the Member for Birmingham, All Saints (Mr. Walden) has now joined in the execution squad, I have to answer his question: granted that it is dead, why not bury it tonight?

Mr. Walden: Corpses smell.

Mr. Lyon: Why wait for the obsequies to take place in another three or four months?
The answer is that it is all very well for us to say that the policy is dead, that it will not be pursued as a live real being for the next four months; but there is still something to be said for the reputation which this good Caesar gained in the period of his life, and it is the reputation which will linger on in the mythology of wage bargaining for the next few months and the next few years.
That is what my right hon. Friend the First Secretary means when she says in her White Paper that what we now have to look forward to is a long-term educational effect. There is no such possibility as a voluntary prices and incomes policy, which has been espoused by some of my hon. Friends. 1 was not here at the happy birth of the prices and incomes policy, but I delighted in its birth and I hoped that the voluntary policy would work, but it did not.
It did not because when the pressure is on and when those who wish for higher wage agreements have the strength to get them and when there is no legal impediment to their getting them, in the end they will get them. That is not to be assuaged by any kind of talk of a voluntary policy. But it is true that the kind of wage negotiations which will go on in future are bound to be settled in the context of our experience over the last three-and-a-half years. There is bound to be some residue which will go forth of the good that came from the prices and incomes policy, namely, the major good that came out of it, the fact that productivity became an essential element in wage bargaining. This will go on for some time, although I think that it will be a declining asset. It will be like Christianity without the Church. The essence of the policy will remain for a while, but as one gets further and further away from the death of the


creator we shall have less and less effect from it, but we shall have some effect.
If we say to the country tonight that the House rejects the policy, when the Government have set their face in favour of continuing it for another four months, the traumatic effect of a defeat on this issue will be such as to kill even that residue of mythology—I would prefer to call it atmosphere—that will be left from the pries and incomes policy. It would be as if to say to all those whose claims are in the pipeline, all those who are waiting, "We can forget about prices and incomes policy. It is finished. The House has voted against the Government. They have been defeated on this." Whether or not we went to the country, whether or not my right hon. Friend the Prime Minister handed in his seals of office, is irrelevant on this issue. They would say, "The past is dead. Now we go forward in a new, changed situation".
I think that it will take some time before that begins to dawn. If we pass the order tonight, I do not believe, any more than does my hon. Friend the Member for All Saints, that it will mean that the Government will try to use their powers under the order.
I take up for my final few minutes a question which for me is much more interesting and has not been raised by anyone in the debate: where are we going from here? My hon. Friend the Member for All Saints asked, "If we have a bridge, what is at the other end of the bridge?" That is the landing place, but where do we go along the road from there. My hon. Friends from the Tribune group would say that they would never have started from that point, and therefore we cannot ask them, because they want a completely different policy. But we must take the policy which the Government are pursuing. Where will they go without the prices and incomes policy?
I have always supported that policy on the basis of its redistributive effect. In my view, this was the most Socialist policy of all. I said in November, 1966, that the importance of the prices and incomes policy was not in a deflationary situation, in which it was then being applied, but in a reflationary situation where there would be more assets to be distributed amongst working people, and it was a question how one wanted to

distribute the increases. As long as we could have had some power to redistribute, I wanted to preserve the prices and incomes policy.
I recognise that that has now gone and that we cannot hope to have a redistributive policy for a prices and incomes policy. The Government have never laid much stress on that, as some of my hon. Friends have complained. They have relied on the policy as part of economic management, part of demand management. With what are they left? They are left with Budgetary policy, which was used in 1968 in a much greater dose than has been used since the war. The result was almost negligible in terms of demand management. The last Budget, significantly less than the 1968 Budget, was nevertheless considerable by comparison with its predecessors. It has had a greater demand effect, but no one can suppose that it would alone have achieved the situation we have today, precisely because the people who operate within the economy have found ways of circumventing Budgetary control as a method of demand management.
So my right hon. Friend the Chancellor has turned to control of money supply. My hon. Friend the Member for All Saints says, "Lay it all on the table. This is all we have in demand management. Use that. Never mind about anything else." If my hon. Friend thinks that they can circumvent Budgetary control of demand, I believe that it will not be long before they find a way of circumventing the method of controlling money supply.
At the moment, it is by no means a refined instrument. It is a very blunt instrument. No one has yet seen how people will circumvent about the only way—at least, the major way—of controlling demand by money supply through the banks. There will, however, be ways of circumventing it. There are other sources of credit. They will be progressively used and gradually we shall have a declining value for control by money supply. In the end, therefore, we may be left with stultified instruments both of Budgetary control and of money supply.
My major charge against that attitude, which is shared not only by my hon. Friend but by some of my hon. Friends who are closer physically to me than is


my hon. Friend, is that this is a general blanket power. One cannot be sure that when one exercises money supply as a method of checking demand, it will operate in specific areas in which one wants to damp down demand but will not operate in areas in which one wants to increase demand.
In addition, it will affect investment. It affects the general buoyancy of the economy. Therefore, if we have to rely on this almost alone, with no help from the prices and incomes policy, a much more selective instrument, in my view we shall put ourselves in real danger in the future in hoping to check the general upsurge of the economy.

9.07 p.m.

Mr. Robert Carr: From the very beginning, in the summer of 1966, when the Government were foolish and wrongheaded enough to embark on a statutory incomes policy, we have said consistently that it would not work and that to the extent that it did work, it would be unfair in its operation. We have forecast over and over again that the Government would be driven to take more and more compulsion over a wider and wider field to get less and less result. For those reasons, we have opposed at every stage the statutory incomes and prices policy, just as we shall oppose this stage tonight.
We have been consistent in our opposition and we have been consistently right. We have seen the Government clambering painfully up the ladder of compulsion and now we see them tumbling down it, only to stop, strangely enough, on the bottom rung of the ladder. There they still are stuck. We forecast again that they will not be able to stay where they are. They will either have to climb up the ladder of compulsion again or they will have to get right off it.
That is what is worrying so many of the hon. Friends of the First Secretary and the Chancellor of the Exchequer. As the hon. Member for Birmingham, All Saints (Mr. Walden) said, they cannot get a straight answer to this question. The same group of hon. Members cannot always get the same answer from the Government. That is one of the reasons for the uncertainty and the lack of success of the Government in so many of their

dealings. That is one of the reasons why this debate is remarkable, because never can there have been more fuss about nothing—which is what I believe it to be —than has preceded this debate.
In figurative Parliamentary terms, hon. Members opposite have been treated not to the Whip but to the cat. They have even been threatened with having to write their election addresses on Christmas Day. The motto they have been given to guide them tonight and the theme which the country is receiving from the Government is, "My party, wrong or wrong."
And what for? On the one hand we are told by the Prime Minister, and by the right hon. Lady, that this policy is vital and that if she does not get these puny powers tonight chaos will break loose, the dam will burst. What is she doing with this dam? She is sticking her finger in the hole while the water flows over the top. On the one hand we are told that it is vital, and on the other hand the Prime Minister and the right hon. Lady are hastening to assure people that, of course, these powers will not be used, and that they are only temporary.
If the Prime Minister was correctly reported, he said to the Labour Party yesterday that at least they will never be used except in the most blatant cases. Like what? What are the blatant cases? The teachers? The nurses? The eight draughtsmen in a Scottish factory we remember a year or two ago? Are those the blatant cases? [An HON. MEMBER: "Bank clerks?"] The bank clerks? They may be argued as being a blatant case. We must all of us ask, as the hon. Member for Birmingham. All Saints asked, is this a policy or is it not?
The right hon. Member for Sowerby (Mr. Houghton)—I was sorry I was not here to hear him, but I am sure that I have been correctly informed of the gist of what he said apparently is in favour of this being a policy, and he would like something done about it; he is worried about wage increases. In other words, I assume that he believes in the need for these powers and the need for their use. I am glad to hear the right hon. Gentleman say "Yes". What does he say to the Prime Minister, who is so busy assuring the other half or the other nine-tenths of the Labour Party that of course these powers are only temporary


and will never be used? I believe what the Prime Minister said to the nine-tenths of the Labour Party, and I believe, like my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), that this order is a charade and that in real terms it is nothing but a cock-and-bull story.
One thing is certain, that the passing of this order tonight will not make the welfare of our economy one whit better six months from now. If it has any effect at all it is bound to make it worse, rather than better.
The right hon. Lady never answered the question, never really attempted to answer the question, as to what will happen in a few months' time. Why will there be chaos, as she says, if she does not get these powers tonight. But then, apparently, everything in the garden will be lovely—when she gives them up in a few months' time? There has been no attempt from the Government to answer that. Perhaps the Chancellor, when I have finished, will be able to give us some answer. I hope he can because at the moment there is no answer to that vital question. I do not think there really is an answer to it.
If this Order is important at all I am sure that its importance is purely symbolic. The only question is, of what is it symbolic? Here there seem to me to be two possibilities. First of all, it may be symbolic as a matter of confidence, to satisfy the International Monetary Fund that the Government are still earnest in their intentions. We remember the Prime Minister telling the country in October, 1964, "You cannot go cap in hand to the central bankers of Europe and maintain your freedom", but since then the Prime Minister has gone on hands and knees to every banker he can find anywhere in the world. He has become so addicted that he is a founder member of "Borrowers Anonymous". And we have surrendered our freedom to the International Monetary Fund.
I was interested to read a report in the Daily Telegraph today of what the Chancellor is said to have said to the Parliamentary Labour Party yesterday, and if he is wrongly reported no doubt he will take the opportunity of saying so in a few moments.
According to this report, he told his party meeting that if he thought it right not to go ahead with reactivation he would tell the International Monetary Fund that that was so. It is interesting that he thinks it necessary to go to tell the International Monetary Fund. But he has not done so, and the International Monetary Fund and its senior officers are not fools. They can see at least as well as we can that the order is a farce and that the incomes policy is a sham which has done harm rather than good.
I do not believe that this is the symbolic reason for the importance of the order, and so I turn to what I conceive to be the only other possibility of this order having great symbolic importance, and that is simply to bolster the status and to save the face of the right hon. Lady the First Secretary. She was sold down the river by her colleagues last summer; so, to make amends, she must be supported now, however wrong, however irrelevant her policy may be. That is a high price for this House and the Labour Party to pay for chivalry.
Her speech today—and her White Paper—was surely one of the most remarkable features of this remarkable debate. She lectured, she theorised and enthused as if she had discovered some wonderful new panacea. She even gave the impression of really believing in the nonsense she was talking, as if she had not been awake and looking round her at the life of the world in the last three-and-a-half years. All that she was talking about today was not new at all. It has been tried for the last three-and-a-half years and has failed, and she has been in charge of it, watching it fail—I was about to say encouraging it to fail—during the last 18 months. The policy has failed economically and in terms of fairness and social justice about which the right hon. Lady romanced perhaps more than about anything else.
Apparently, so she said today, these evil effects, which to be fair to her she admitted, are because this great policy has been brutalised. But from tonight onwards it will be humanised, and all in the garden will be lovely and all the economic and social benefits will flow. Those who are credible may believe it if they like, but I do not think many will.
Why should we be compelled to press on with a policy which has been such a


disastrous failure in almost every respect? Before we vote, we might do well to look at the record. First, let us look at the record of how the latest phase of the incomes policy has worked over the last 18 months. Let us recall what the Chancellor of the Exchequer laid down as the requirement for the statutory incomes policy from March, 1968, to the month which is just ending. He said:
…its main feature will be a ceiling of 31 per cent. on increases…".
What facts are disclosed in the superficial information in the White Paper? From April to December, 1968, hourly wage rates rose by 4·5 per cent. and earnings by 7·9 per cent. From January to September, 1969, hourly wage rates rose by 4·3 per cent. and earnings by 6·6 per cent. In September this year, settlements of wage rates, not earnings, averaged over 6 per cent. In October, settlements of wage rates averaged about 8½ per cent. So much for the 3½ per cent. ceiling.
Perhaps we shall be told that these great excesses over the ceiling were all due to "copper-bottomed" productivity agreements. The Chancellor of the Exchequer had something to say about that, too, in his Budget Speech:
There will be an exception to the ceiling for productivity agreements—stringently tested —which raise productivity sufficiently to justify a pay increase above 3½ per cent."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 264.]
"Stringently tested" were the operative words.
What have we had? We have had 10 per cent. for the miners, 16 per cent. for the dustmen, 16 per cent. for the exhibition stand fitters, and so on, as exampled so well by my hon. Friend the Member for Bath (Sir E. Brown). Were all these stringently tested for productivity? Of course not, and both the right hon. Gentleman and the right hon. Lady know that they were not. The whole thing was a sham, a farce.
There is now accumulating evidence that in important individual settlements the operation, or the attempted operation, of the statutory incomes policy is forcing settlements to higher levels than would have been the case had they been left to free collective bargaining.
I will give the House two examples—[Interruption.] I am concerned with the

merits of the policy from the point of view of the national economy, which I thought were the merits which the Government Front Bench were trying to present to the House and to the country.
The first example concerns the exhibition workers. The increase finally accepted by the D.E.P. in September was higher than that first voluntarily agreed by collective bargaining between the employers and the unions but disallowed by the D.E.P. at that time. There is a higher increase resulting from the statutory incomes policy.
Let us look at the still current case of the British Road Services drivers. Had they been left as free agents, there is little doubt that the top management of B.R.S. would have settled that claim for 15s. That was all that the unions were asking for in the first place. But under this policy they were not left as free agents; they were not allowed to settle in the normal way. So now B.R.S. has had to offer not 15s. a week, but £3 a week. That is the statutory incomes policy in action.
I ask the House to look at another test laid down, not this time by the Chancellor but by his right hon. Friend, the Deputy Leader of the House, when he was Secretary of State for Economic Affairs. On 21st March, 1968, in the Budget debate, the right hon. Gentleman told the House:
It is, moreover, a necessary condition of the economic adjustment which we have to make that incomes should rise more slowly than the cost of living over the next year."—[OFFICIAL REPORT, 21st March, 1968; Vol-761, c. 622.]
That was a necessary condition. That certainly was incomes policy with a vengeance. That was a planned reduction in the standard of living and that, rightly, put anger and fear into the hearts of hon. Members on both sides of the House and people outside as well. But they need not have worried, because it never happened, as the figures in the White Paper show. So again, if we apply that test, the whole thing is a farce.
It is not only in this last 18 months phase that the policy has failed. It has failed just as much over the whole period since its introduction. I ask the House to look at paragraph 11 of the White Paper, because there the Government


define 'what they claim from the beginning to have been the three objectives of the statutory prices and incomes policy. Those three objectives are:
to keep prices more stable than in the past; to achieve faster growth in the real standard of living; to get a more rational and fair relationship between the incomes of various groups, and in particular to improve the position of low paid workers.
Let us see how the policy has worked out under each of those three objectives chosen by the Government as the test for their policy.
The first is
to keep prices more stable than in the past.
The reverse has happened. In the six years prior to 1964, under a Conservative Government and with no statutory prices and incomes policy, the average increase in prices was 2·5 per cent. per year. In the five years since 1964, under a Labour Government, the average increase in prices has been 4·7 per year—almost double. And the right hon. Lady has the affrontery to tell us that we have no prices policy.
Let us forget the first one-and-a-half years of the Labour Government and take the following 3½ years—the period during which we have had this wonderful prices and incomes policy. In those years the price increase has also been about 4½ per cent. a year on average, and the price increase in 1968 alone was 6·2 per cent—the highest since there was last a Labour Government, almost 20 years ago. If the Chancellor says that it was because of devaluation, that is true —but that was the first devaluation since there was last a Labour Government, 20 years ago.
Let the right hon. Lady accuse us as she likes of having no prices policy. I have said before and I say again that my right hon. Friend's action in abolishing resale price maintenance did more than her precious policies will do in a decade to keep prices down. The test of a prices policy is not what is said but what is achieved.
I pass to the second objective of the prices and incomes policy—"to achieve faster growth in the real standard of living." What has happened? The standard of living, measured in terms of personal, after-tax income at constant prices, rose on average by 3 per cent.

per year between 1951 and 1964. It has risen only 1·5 per cent. per year, on average, between 1964 and 1968. Under a Conservative Government there was half the rise in prices and double the rate of increase in the standard of living. That is the comparison between the two Governments—and when we were in power there was no statutory prices and incomes policy.
If we take the case of the man who earns the average industrial wage, after allowing for the increased tax that he is paying and the rise in prices, we find that he is worse off, in terms of purchasing power, than he was in 1964.
I pass to the third objective laid down by the Government in their White Paper—
to get a more rational and fair relationship between incomes of various groups, and in particular to improve the position of low paid workers.
Who believes that a statutory prices and incomes policy has helped to achieve this? It may be true, as the hon. Member for Birmingham, All Saints (Mr. Walden) said, that the problem was there before. The prices and incomes policy may not have created the problem, but where is there any evidence of any kind to suggest that it has alleviated the problem? Such evidence as there is tends to suggest that it has made it somewhat worse. It is false to claim that it has made it better.
On all the three tests laid down by the Government themselves, the statutory prices and incomes policy has failed, and has failed miserably.
But there was a fourth test, which is not now mentioned by the Government but about which we heard quite a lot when this policy was "new-and-all". That was to provide an alternative to higher unemployment. That claim was often made. At Blackpool on 5th September, 1966—two months after it started —the Prime Minister proclaimed that his Government's incomes policy was "our only guarantee against unemployment". Let us look at the record. In 13 years of Tory Government unemployment exceeded 500,000 in only nine months out of the 156 months that we were in power. Under the Labour Government and under this policy, it has exceeded 500,000 in 27 out of the last 28 months. The unemployment levels in November of this year


and November, 1967, both incomes policy years, were the highest November totals since 1940.
That is the final and most disgraceful idiocy of all about this policy, especially in the light of the recent researches by Professor Lipsey and Mr. Parkin of Essex University which give a strong indication that at the high levels of unemployment deliberately operated by this Government, a statutory prices and incomes policy makes matters worse rather than better. If it had any justification at all it was only at the lower levels of unemployment operated under the Tory Government.
I repeat my right hon. Friend's request to the Chancellor of the Exchequer to deal with the Lipsey paper. It is the only serious attempt of which I know to analyse these matters in this way. What is in the White Paper is the most specious and superficial stuff that one could possibly imagine. Surely the House must agree with the hon. Member for All Saints that what is in the White Paper is hardly a historical record of what has happened. If the right hon. Gentleman disagrees with the Lipsey analysis or thinks it inadequate, let him promise that the Government will undertake a proper research and publish the results so that we may know the truth as far as it can be determined.
All the evidence proves that the statutory prices and incomes policy has been a failure. It is a myth and a folly. Unfortunately it is not just a joke folly. It is a damaging and dangerous folly and it is inflammatory. It encourages militancy. It does not work fairly. It has had little, if any, effect. The weak have suffered. The strong have got away with it. It has made responsible union leaders' jobs more difficult when they should have been made easier. It has played into the hands of those who want to make trouble and to get things by force. The policy has not brought about the just society about which the right hon. Lady talks so romantically. It has encouraged the "get-it-by-force" society. It will be one of the Government's most evil legacies to the country. It is a poisonous radioactivity which will contaminate our society for a long time to come.
The Government threatened anti-strike laws based, in our view wrongly, on penal sanctions and Ministerial intervention. They said that those laws were vital in the national interest, yet they ran away when they met sectional opposition. Similarly we have always believed that a statutory incomes policy was wrong in principle and practice. We have said so and have backed our opinion with our votes. But if, like the Government, one believes that statutory control of wages is right and necessary, it must be carried through with firmness and consistency. That is just what the Government have failed to do. They give in to the strong. They yield to force. They clamp down only occasionally on those whom they judge to be relatively weak, like bank clerks, teachers and nurses.
"Irresponsibility pays" is the message that the Government are encouraging to be broadcast throughout the country. Teachers who go on strike in breach of agreement deserve to be condemned, but, as matters are at the moment, which of us can put our hands on our hearts and censure them and tell them that they will do better rather than worse if they chuck their present methods and return to the responsible use of their constitutional bargaining machinery? Until we can say that in good faith to the teachers, the nurses, and everybody else, standards of responsibility, as well as standards of living, will slide into further decline. So the Government policy will go on stimulating industrial strife, rather than putting peace and order in place of strife.
The Government's own policies are a direct cause of the alarmingly worsening strike record from which we are suffering. I put it to the Chancellor that his economic policies will bring us into an economic situation where things are more likely to get worse than to get better in this respect. Wages are exploding upwards. At the same time, a severe monetary policy is pressing the economy downwards, with a considerable time lag between cause and effect. The effects of the Chancellor's unprecedented monetary squeeze cannot yet be predicted with certainty. With this collision between upward and downward forces in the economy, the inevitable casualties are bound to be investment, on the one hand, and industrial peace on the other.
In conclusion, I return to where I began and ask about the reason for the order. In view of the evidence of failure in the past, and worse than failure; in view of the lack of the slightest reason to expect anything better in the future, why do we have the order tonight? Why, above all, is there this build-up of hysterical urgency that we have seen?
I suggested at the beginning two symbolic reasons, and I left the House with the feeling that only one of them was tenable. The only other reason put forward by the Government with any rationality is that this is a bridging operation. But a bridge to what? A bridge to a voluntary policy? If so, it is a strange way of getting there, since both T.U.C. and the C.B.I. are in bitter opposition to it. A bridge, perhaps, to a permanent policy? Or is it a temporary policy, whether voluntary or compulsory?
The evidence of the White Paper on this point is extremely confusing, and I hope that the Chancellor of the Exchequer will make it less confusing. Paragraph 3, on page 5 states that,
a productivity, prices and incomes policy must continue to play a key role…".
That sounds pretty permanent.
Paragraph 29 on page 12 states, in justifying the need for the powers contained in the order, that these powers
will enable the Government to require early warning of proposed pay and price increases. Such notification is essential to the operation of any prices and incomes policy".
That sounds pretty compulsory.
Paragraph 32 on page 12 states that the purpose of the powers in the order
is to enable the Government to delay…implementation
while they inquire and have reports made. That also sounds permanent and compulsory.
The evidence so far from the White Paper—[Interruption.] The chief Whip says, "Twenty-five minutes". He may like to 14 now that at the very beginning of today I asked for half-an-hour; and I rose at ten minutes past nine.
Paragraph 33 on page 12 says:
The Government hopes that it will not be necessary to perpetuate these delaying powers in the legislation…".
Which is it? You pay your money and you take your choice. What the House wants to know from the Chancellor is:

which is it? Is it permanent or temporary, voluntary or compulsory, or which mixture of the two?
Where does this bridge lead to? All that we know is that it leads to the land of the C.I.M. That should be enough to excite us and to give us hope. The Government do not yet know what the C.I.M. is. They are thinking hard, and I suppose they must not be disturbed. Perhaps the right hon. Lady has had a vision about it, but if so the children must not yet be told.
The bridge leads to the land of the C.I.M.—Castles in Mid-air? Perhaps, after all, in that realm of madness lies the real mystery behind this order, because we are experiencing a classic example of the old adage that those whom the gods wish to destroy, they first make mad.

9.40 p.m.

The Chancellor of the Exchequer (Mr. Roy Jenkins): In the 30-minute long dirge of despair by the right hon. Member for Mitcham (Mr. R. Carr) I failed to detect a single constructive suggestion for dealing either with the prices and incomes policy or with the more general economic policy. I shall in the course of the fairly limited time remaining to me, come back to some of the points made by the right hon. Gentleman, and some of the points raised by the right hon. Member for Bexley (Mr. Heath), but I want, first, to deal with the suggestions made by one or two of my hon. Friends, notably my hon. Friend the Member for Watford (Mr. Raphael Tuck), and by one or two other hon. Members at various stages in this dispute, that there is inequity in our treatment of dividends and wages, that dividends are being treated more leniently.
That really will not bear examination. In the first place, dividends and wages are not directly comparable animals, partly for reasons which put dividends at a disadvantage, partly for another reason which puts them at an advantage. Wages, broadly speaking, at least in our post-war economic climate, can never go down. Dividends most certainly can. There were 716 decreases in the 18 months to this September, and in both 1967 and 1968 the aggregate of dividend payments was lower than in either 1965 or 1966. There is no question


whether they rose enough to keep pace with the rise in the cost of living. They actually fell in money terms. Indeed, if one looks at the whole picture from 1964 to this year, one sees that dividends may have risen over the whole period at an annual rate of about 2 per cent., against an average earnings increase of 6 per cent. a year. I have do doubt that in 1970 at least there will continue to be many restraining influences on dividends, and that the average rate of increase will be slow, a good deal slower than that of average earnings.
There is, however, another respect in which dividends are different from wages, and this time it is favourable to the shareholder. Dividend restraint cannot effect the total profitability of either an individual company, or the company sector as a whole. It does not, therefore, in the short run have much effect on share values, and share values can be more important to the purchasing power of a shareholder than his actual dividend income.
There are two points to be made here. First, this underlines the undesirability of detailed dividend control of the individual company for more than a strictly limited period. It may leave some companies with more resources than they need, and others with less. It tends to gum up the capital market, and may prompt takeovers which have no industrial justification. The second point is that if the shareholder's purchasing power is to be measured by the value of his portfolio, no one can possibly argue that the recent past has been a good year for shareholders. Just under a year ago the Financial Times index was 520. Today it is 390. It will be a long crawl back, and on no basis does the argument that we have treated dividends or capital better than wages begin to stand up.
I turn to the central issue before us this evening. It is the question why, and whether, we need to modify the delaying powers of Part II in the transitional phase to a wholly voluntary incomes policy. We are mostly, certainly on this side of the House, agreed that a voluntary policy is the desirable goal to be achieved as quickly as possible. I think that that goes for all of my hon. Friends who have spoken in this debate,

though my hon. Friend the Member for Birmingham, All Saints (Mr. Walden), in his most persuasive speech, did not advance many arguments in favour even of a voluntary incomes policy. I thought that, as is the case with someone who uses logic with brilliant precision, he tended at a certain stage to go too far in his pursuit of a simple answer to all our problems.
I believe that monetary policy has had a great deal to do with the improvement in our position in the past year. My hon. Friend's view that it has everything to do with it, that it has alone solved our problems, that it alone can deal with our problems in future, seems to me exaggerated. I believe that it has been monetary policy buttressing or buttressed by fiscal policy and the prices and incomes policy which has enabled us to achieve the results which we have achieved and not monetary policy on its own. I believe that he is carrying a good idea to an excessive conclusion when he tries to argue that case.
I have said that on this side of the House we fully agree about the desirability of a voluntary policy. The position opposite appears to me to be more obscure. Our dispute attracts more attention because we have the responsibility. We have to put the order forward. We have to say precisely what we are going to do. The differences on the other side seem to me more fundamental. No one could have stressed more strongly than the right hon. Member for Barnet (Mr. Maudling), when he was Chancellor of the Exchequer, the central importance of an incomes policy. I do not believe that he is someone who says and believes different things when he is out of office than when in office. On 13th November, 1963, he said:
For our domestic economy to remain sound I come back once again to what seems to me to be the one fundamental necessity 
—not even a fundamental necessity but the fundamental necessity—
—a rational incomes policy."—[OFFICIAL REPORT, 13th November, 1963; Vol. 684, c. 208.]
In the 1964 Budget Statement, he said:
It is a fact from which there is no escape that if we wish to achieve steady and sustained economic growth we must between us agree upon an effective incomes policy."—[OFFICIAL REPORT, 14th April, 1964; Vol. 693, c. 263.]


No doubt the right hon Member for Enfield, West (Mr Iain Macleod) anticipates, as he occasionally does, the direction of my thought No doubt the right hon Member for Barnet will say that he always meant a wholly voluntary policy.
Then we had the right hon Member for Wolverhampton, South-West (Mr. Powell). He spoke today. He also spoke last Saturday afternoon. It is agreeable to have him speaking on the same subject both outside and inside the House in one week. He shared responsibility in 1963, even it not in 1964. What did he say on Saturday? He said:
Thirdly, a voluntary prices and incomes policy is as impracticable as a compulsory one, and more absurd.
What was his solution? A general reduction of demand, concentrated admittedly, on Government expenditure. If there is to be any logic in what he is saying, not presumably compensated for elsewhere, a general reduction in demand. In other words, a more deflationary economy in which wages and prices can safely be left to find their own level. Just how deflationary that would have to be I leave it to the House to judge, but recent experience, in America, for example, shows that this involves very heavy unemployment.
Where do the rest of the Opposition stand? To judge from the speech of the right hon. Member for Mitcham, it is somewhere between Barnet and Wolverhampton—without either the sense of responsibility of the right hon. Member for Barnet or the reckless logic of the right hon. Member for Wolverhampton, South-West.
The Leader of the Opposition made what was to me a bewildering speech. He attacked the Government and, in particular, my right hon. Friend the Prime Minister for seeking to initiate a wage inflation between now and the next election. I can think of easier ways of doing that than introducing this order. The right hon. Gentleman did this upon the basis of some pretty spurious figures. The logic of his position would have been to demand a much stronger prices and incomes policy and not to urge his party to vote against the order. He gave no indication whatever of his policy, and instead tried to lead off into a general economic debate. I shall return briefly to that part of his speech at the end of

what I have to say. I hope that the right hon. Gentleman steers a straighter course to Tasmania than he did here this afternoon.
We believe that a prices and incomes policy is and will continue to be necessary. We believe that the incomes policy must be put on a wholly voluntary basis as soon as is safely practicable, but in the transition from the stronger powers of the 1968 legislation we need the modified powers of Part II. That we have always made clear. It is not a sudden decision on the part of the Government. It was announced firmly in my Budget speech, and reiterated by my right hon. Friend in the spring of last year.
No one can prove exactly what the effect of the prices and incomes policy has been over the past 18 months, or over any other period. It is not in the nature of the subject for exact proof to be possible. I discount fairly heavily—this was referred to by both right hon. Gentlemen speaking from the Front Bench opposite —the view that the work of Professor Lipsey and Mr. Parkin proves that the effect has been non-existent or even perverse. It is an interesting study, but the right hon. Gentlemen are putting upon it execessive weight at the present time. It is an unpublished work. It cannot be published by the Government, for they do not own the copyright; it depends entirely on these academic gentlemen. I hope very much that they will publish it, and that, when published, it will be—it has not been yet the subject of considerable academic scrutiny and discussion, for there is considerable doubt about its methodology.
What the study appears to prove, if it proves anything, is that only Sir Stafford Cripps was really effective getting a wage restraint policy, that the right hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd) was not successful, and neither were a lot of others, too. I suggest that there are a great many variables involved in the equation, and it is extremely difficult, certainly comparing what happened in the economy 20 years ago with what has happened today, to make any clear deductions. I do not for a moment believe that these two distinguished academic gentlemen would believe that their interesting essay should have put upon it, without any further discussion, the weight which the


two right hon. Gentlemen opposite endeavoured to put upon it today.
My own belief is that the prices and incomes policy has greatly helped to preserve our competitive position over the post-devaluation period. Price increases were inevitably heavy after devaluation. This is the nature of devaluation; it has never been denied by me, and I should never seek to deny it. There were also indirect tax increases to secure the switch of resources to the balance of payments. But in some ways it is a remarkable fact that, despite this, price increases in this country, with a 14 per cent. devaluation, have been no greater over the period since the beginning of 1968 than in the United States, without devaluation, the country with a tradition of the greatest price stability in the 1950s and 1960s.
The right hon. Gentleman the Leader of the Opposition said that some part of our devaluation advantage remained in relation to the United States but that all of it had gone in relation to Europe. If I may say to the right hon. Gentleman, that was a gross exaggeration, a derogatory exaggeration and something of a typical exaggeration. Our price advantage is wholly preserved in relation to the United States and is largely preserved in relation both to the European area and the rest of the world as a whole. I do not believe that would have been done without the policy which my right hon. Friend the First Secretary has carried out during the past two years.
As to the future, the key question is how do we reconcile the need for a small remaining reserve measure of compulsion now, with the intention and desire, which certainly exists, to move later to a fully voluntary system? There is no illogicality about this, unless we believe that something which is right at one time is always right at another time, and that is not so in politics or history.
I can give three good reasons. In the past few weeks we have had a considerable advance in the payment of the low paid in the public sector. In itself that is a good thing, but not if everyone follows suit, if we merely have an increase in the private level and no change in relativity. It is therefore particularly desirable that we should maintain certain powers for this reason.
Secondly, we inevitably had two years of severe price inflation, not damaging to our competitive position because of what has been happening to other people. I do not believe that society can or should live comfortably with 5 per cent. a year inflation for long. Nor is there any reason why it should. The effects of devaluation which were bound to be there for two years are now dying away. I am not giving away any secrets when I say that I am not planning another 1968 style Budget.
We should now be able to look forward to a greatly reduced rate of price increase. We could break the price-inflation psychology but not if we have a wage or price explosion. This is another reason why it was necessary to preserve effective transitional control over the next few months. There is still our competitive position. The United States has been acting hard on the anti-inflation rôle—not much has happened so far but it could happen and nothing could be worse than that we should go on inflating when other people are stopping. There is therefore no illogicality about regarding a phase of modified control as being a necessary transition period to a voluntary policy.
In my last three minutes I wish, following the remarks of the right hon. Gentleman the Leader of the Opposition, who devoted the main part of his speech to this, to turn to somewhat wider economic matters. He announced in a pained way that he had been accused of not welcoming the trade improvement. He then proceeded to welcome it. I did not feel overwhelmed by his warmth. I was a little reminded of O'Connell's remark that Peel's smile was like the silver plate on a coffin. He immediately went on to a whole series of qualifications, perhaps the principal one of which was that we were merely floating up on a wave of bouyant world trade.
It is a most extraordinary theory that buoyant world trade on its own solves all our problems. If this were so, no one's balance of payments position could change, everyone else would be perfectly all right. The position is at present that during this period of buoyant world trade, so far in this year we have very slightly improved our share. That has been the first time for decades past—in complete contrast with previous times of


buoyant world trade. It has been precisely in previous times of buoyant world trade that we have most lost our relative position.
In 1963–64 when the right hon. Gentleman was President of the Board of Trade world trade grew by 16 per cent., our exports by 5 per cent. We lost 1 per cent. of the share in that year alone, the worst performance since the previous year of buoyant world trade, which was 1959–60. Of course it is the case that if world trade turns down that would present problems for us, but less prob-

lems than if we had not got our economy and our balance of payments position on a much more secure basis in the past nine months or year.

I believe that the prices and incomes policy has been necessary to achieve that; I believe that this order which we are asking the House to approve tonight is necessary to continue our position and I ask the House to support me.

Question put:—

The House divided: Ayes 289, Noes 261.

Division No. 40.]
AYES
[10.0 p.m.


Abse, Leo
Diamond, Rt. Hn. John
Howie, W.


Albu, Austen
Dobson, Ray
Hoy, Rt. Hn. James


Alldritt, Walter
Doig, Peter
Huckfield, Leslie


Alien, Scholcfield
Dunn, James A.
Hughes, Rt. Hn. Cledwyn (Anglesey)


Archer, Peter (R'wley Regis &amp; Tipt'n)
Dunnett, Jack
Hughes, Hector (Aberdeen, N.)


Armstrong, Ernest
Dunwoody, Mrs. Gwyneth (Exeter)
Hunter, Adam


Ashley, Jack
Dunwoody, Dr. John (F'th &amp; C'b'e)
Hynd, John


Ashton, Joe (Bassetlaw)
Eadie, Alex
Jackson, Colin (B'h'se &amp; Spenb'gh)


Bacon, Rt, Hn, Alice
Edelman, Maurice
Janner, Sir Barnett


Bagier, Gordon A. T.
Edwards, Robert (Bilston)
Jay, Rt. Hn. Douglas


Barnes, Michael
Edwards, William (Merioneth)
Jeger, George (Goole)


Barnett, Joel
Ellis, John
Jeger, Mrs. Lcna(H'b'n&amp;St.P 'cras, S.)


Baxter, William
English, Michael
Jenkins, Rt. Hn. Roy (Stechford)


Beaney, Alan
Ennals, David
Johnson, Carol (Lewisham, S.)


Bence, Cyril
Ensor, David
Johnson, James (K'ston-on-Hull, W.)


Benn, Rt. Hn. Anthony Wedgwood
Evans, Albert (Islington, S.W.)
Jones, Dan (Burnley)


Bennett, James (G'gow, Bridgeton)
Evans, Fred (Caerphilly)
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)


Binns, John
Faulds, Andrew
Jones, J. Idwal (Wrexham)


Bishop, E. S.
Fernyhough, E.
Jones, T. Alec (Rhondda, West)


Blenkinsop, Arthur
Finch, Harold
Kelley, Richard


Boston, Terence
Fitch, Alan (Wigan)
Kenyon, Clifford


Bottomley, Rt. Hn. Arthur
Fitt, Gerard (Belfast, W.)
Lawson, George


Boyden, James
Fletcher, Rt. Hn. Sir Eric(Islington,E.)
Leadbitter, Ted


Bradley, Tom
Foley, Maurice
Ledger, Ron


Bray, Dr. Jeremy
Ford, Ben
Lee, Rt. Hn. Frederick (Newton)


Brooks, Edwin
Forrester, John
Lee, Rt. Hn. Jennie (Cannock)


Broughton, Sir Alfred
Fowler, Gerry
Lestor, Miss Joan


Brown, Rt. Hn. George (Belper)
Fraser, John (Norwood)
Lever, Rt. Hn. Harold (Cheetham)


Brown, Hugh D. (G'gow, Provan)
Freeson, Reginald
Lewis, Ron Harold (Carlisle)


Brown,Bob(N'c'tle-upon-Tyne,W.)
Galpern, Sir Myer
Lomas, Kenneth


Brown, R. W. (Shoreditch &amp; F'bury)
Gardner, Tony
Loughlin, Charles


Buchan, Norman
Garrett, W. E.
Luard, Evan


Buchanan, Richard (G'gow, Sp'burn)
Ginsburg, David
Lyon, Alexander W. (York)


Butler, Herbert (Hackney, C.)
Golding, John
Lyons, Edward (Bradford, E.)


Butler, Mrs, Joyce (Wood Green)
Gordon Walker, Rt. Hn, P. C.
Mabon, Dr. J. Dickson


Callaghan, Rt. Hn. James
Gray, Dr. Hugh (Yarmouth)
McBride, Neil


Cant, R. B.
Greenwood, Rt. Hn. Anthony
McCann, John


Carmichael, Neil
Gregory, Arnold
MacColl, James


Castle, Rt. Hn. Barbara
Grey, Charles (Durham)
MacDermot, Niall


Chapman, Donald
Griffiths, Eddie (Brightside)
Macdonald, A. H.


Coe, Denis
Griffiths, Rt. Hn. James (Llanelly)
McElhone, Frank


Coleman, Donald
Gunter, Rt. Hn. R, J.
McGuire, Michael


Conlan, Bernard
Hamilton, James (Bothwell)
McKay, Mrs. Margaret


Corbet, Mrs. Freda
Hamilton, William (Fife, W.)
Mackenzie, Gregor (Rutherglen)


Crawshaw, Richard
Hamling, William
Mackie, John


Cronin, John
Harnnan, William
Mackintosh, John P,


Crosland, Rt. Hn. Anthony
Harper, Joseph
Maclennan, Robert


Dalyell, Tam
Harrison, Walter (Wakefield)
MacMillan, Malcolm (Western Isles)


Darling, Rt. Hn. George
Hart, Rt. Hn. Judith
McMillan, Tom (Glasgow, C.)


Davidson, Arthur (Accrington)
Haseldine, Norman
McNamara, J. Kevin


Davies, E Hudson (Conway)
Hattersley, Roy
MacPherson, Malcolm


Davies, G. Elfed (Rhondda, E.)
Hazell, Bert
Mahon, Simon (Bootle)


Davies, Dr. Ernest (Stretford)
Healey, Rt. Hn. Denis
Mallalieu, E. L. (Brigg)


Davies, Rt. Hn. Harold (Leek)
Henig, Stanley
Mallalieu,J.P.W.(Huddersfield,E.)


Davies, lfor (Gower)
Hilton, W. S.
Manuel, Archie


de Freitas, Rt. Hn. Sir Geoffrey
Hobden, Dennis
Mapp, Charles


Delargy, H. J.
Hooley, Frank
Marks, Kenneth


Dell, Edmund
Houghton, Rt. Hn. Douglas
Marquand, David


Dempsey, James
Howarth, Robert (Bolton, E.)
Marsh, Rt. Hn. Richard


Dewar, Donald
Howell, Denis (Small Heath)
Mason, Rt. Hn. Roy




Maxwell, Robert
Price, William (Rugby)
Swain, Thomas


Mayhew, Christopher
Probert, Arthur
Taverne, Dick


Mellish, Rt. Hn. Robert
Pursey, Cmdr. Harry
Thomas, Rt. Hn. George


Millan, Bruce
Randall, Harry
Thomson, Rt. Hn. George


Miller, Dr. M. S.
Rankin, John
Thornton, Ernest


Milne, Edward (Blyth)
Rees, Merlyn
Tinn, James


Mitclhell, R. C. (S'th'pton, Test)
Rhodes, Geoffrey
Tomney, Frank


Molloy, William
Richard, Ivor
Tuck, Raphael


Morgan, Elystan (Cardiganshire)
Roberts, Albert (Normanton)
Urwin, T. W.


Morris, Alfred (Wythenshawe)
Roberts, Rt. Hn. Goronwy
Varley, Eric G.


Morris, Charles R. (Openshaw)
Roberts, Gwilym (Bedfordshire, S.)
Wainwright, Edwin (Dearne Valley)


Morris, John (Aberavon)
Robinson, Rt. Hn. Kenneth(St.P'c'as)
Walker, Harold (Doncaster)


Moyle, Roland
Rodgers, William (Stockton)
Wallace, George


Mulley, Rt. Hn. Frederick
Roebuck, Roy
Watkins, David (Consett)


Murray, Albert
Rogers, George (Kensington, N.)
Watkins, Tudor (Brecon &amp;' Radnor)


Noel-Baker, Rt. Hn. Philip
Rose, Paul
Weitzman, David


Oakes, Gordon
Ross, Rt. Hn. William
Wellbeloved, James


Ogden, Eric
Rowlands, E.
Wells, William (Walsall, N.)


O'Halloran, Michael
Shaw, Arnold (llford, S.)
Whitaker, Ben


O'Malley, Brian
Sheldon, Robert
White, Mrs. Eirene


Oram, Albert E.
Shinwell, Rt. Hn. E.
Whitlock, William


Orbach, Maurice
Shore, Rt. Hn. Peter (Stepney)
Wilkins, W. A.


Oswald, Thomas
Short, Rt. Hn. Edward(N,c'tle-u-Tyne)
Willey, Rt. Hn. Frederick


Owen, Dr. David (Plymouth, S'tn)
Short Mrs. Renée (W'hampton,N.E.)
Williams, Alan (Swansea, W.)


Owen, Will (Morpeth)
Silkin, Rt. Hn. John (Deptford)
Williams, Alan Lee (Homchurch)


Padley, Walter
Silkin, Hn. S. C. (Dulwich)
Williams, Mrs. Shirley (Hitchin)


Page, Derek (King's Lynn)
Silverman, Julius
Williams, W. T. (Warrington)


Palmer, Arthur
Skeffington, Arthur
Willis, Rt. Hn. George


Pannell, Rt. Hn. Charles
Slater, Joseph
Wilson, Rt. Hn. Harold (Huyton)


Parker, John (Dagenham)
Small, William
Wilson, William (Coventry, S.)


Parkyn, Brian (Bedford)
Snow, Julian
Winnick, David


pavitt, Laurence
Spriggs, Leslie
Woodburn, Rt. Hn. A.




Woof Robert


Pearson, Arthur (Pontypridd)
Steele, Thomas (Dunbartonshire, W.)
wyatt, Woodrow


Peart, Rt. Hn. Fred
Stewart, Rt. Hn. Michael



Pentland, Norman




Perry, Ernest G. (Battersea, S.)
Stonehouse, Rt. Hn. John
TELLERS FOR THE NOES:


Prentice, Rt. Hn. Reg
Strauss, Rt. Hn. G. R.
Mr. J. D. Concannon and


Price, Christopher (Perry Barr)
Summer-skill, Hn. Dr. Shirley
Mr. Ioan L. Evans.




NOES


Alison, Michael (Barkston Ash)
Channon, H. P, G.
Grant, Anthony


Allason, James (Hemel Hempstead)
Chataway, Christopher
Grant-Ferris, Sir Robert


Amery, Rt. Hn. Julian
Chichester-Clark, R.
Gresham Cooke, R.


Archer Jeffrey (Louth)
Clegg, Walter
Grieve, Percy


Astor John
Cooke, Robert
Griffiths, Eldon (Bury St. Edmunds)


Atkins Humphrey (M't'n &amp; M'd n)
Cooper-Key, Sir Neill
Grimond, Rt. Hn. J.


Awdry, Daniel
Cordle, John
Gurden, Harold


Baker Kenneth (Acton)
Corfield, F. V.
Hall, John (Wycombe)


Baker, w. H. K. (Banff)
Costain, A. P.
Hall-Davis, A. G. F.


Ralniel Lord
Craddock, Sir Beresford (Spelthorne)
Hamilton, Lord (Fermanagh)


Barber, Rt. Hn. Anthony
Crouch, David
Hamilton, Michael (Salisbury)


Bateford Brian
Crowder, F. P.
Harris, Frederic (Croydon, N.W.)


Beamish, Col. Sir Tufton
Dalkeith, Earl of
Harrison, Brian (Maldon)


Bell, Ronald
Dance, James
Harrison, Col. Sir Harwood (Eye)


Bennett, Sir Frederic (Torquay)
Davidson, James(Aberdeenshire, W.)
Harvey, Sir Arthur Vere



Dean, Paul
Harvie Anderson, Miss


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Deedes, Rt. Hn. W. F. (Ashford)
Hastings, Stephen


Berry, Hn. Anthony
Digby, Simon Wingfield
Hawkins, Paul


Biffen, John
Dodds-Parker, Douglas
Hay, John


Biggs-Davison, John
Doughty, Charles
Heald, Rt. Hn. Sir Lionel


Birch, Rt. Hn. Nigel
Douglas-Home, Rt. Hn. Sir Alec
Heath, Rt. Hn. Edward


Black, Sir Cyril
Drayson, G. B.
Heseltine, Michael


Blaker, Peter
Eden, Sir John
Higgins, Terence L.


Boardman, Tom (Leicester, S.W.)
Elliot, Capt. Walter (Carshalton)
Hlley, Joseph


Body, Richard
Emery, Peter
Hill, J. E. B.


Bossom, Sir Clive
Errlngton, Sir Eric
Hirst, Geoffrey


Boyd-Carpenter, Rt. Hn. John
Ewing, Mrs. Winifred
Hogg, Rt. Hn. Quintin


Boyle, Rt. Hn. Sir Edward
Eyre, Reginald
Hooson, Emlyn


Brewis, John
Farr, John
Hordern, Peter


Brinton, Sir Tatton
Fisher, Nigel
Hornby, Richard


Bromley-Davenport, Lt. -Col. SirW alter
Fletcher-Cooke, Charles
Howell, David (Guildford)


Brown, Sir Edward (Bath)
Fortescue, Tim
Hunt, John


Bruce-Gardyne, J.
Foster, Sir John
Hutchison, Michael Clark


Bryan, Paul
Fraser,Rt. Hn. Hugh (St'fford &amp; Stone)
Iremonger, T. L.


Buchanan-Smith, Allck (Angus,N&amp;M)
Fry, Peter
Irvine, Bryant Godman (Rye)


Buck, Antony (Colchester)
Galbraith, Hn. T. G.
Jenkin, Patrick (Woodford)


Bullus, Sir Eric
Gibson-Watt, David
Jennings, J. C. (Burton)


Burden, F. A.
Gilmour, Ian (Norfolk, C.)
Johnson Smith, G. (E. Grinstead)


Campbell, B. (Oldham, W.)
Gilmour, Sir John (Fife, E.)
Johnston, Russell (Inverness)


Campbell, Gordon (Moray &amp; Nairn)
Glyn, Sir Richard
Jones, Arthur (Northants, S.)


Carlisle, Mark
Goodhart, Philip
Jopling, Michael


Carr, Rt. Hn. Robert
Goodhew, Victor
Joseph, Rt. Hn. Sir Keith


Cary, sir Robert
Gower, Raymond
Kaberry, Sir Donald







Kerby, Capt. Henry
Murton, Oscar
Sinclair, Sir George


Kershaw, Anthony
Nabarro, Sir Gerald
Smith, Dudley (W'wlck &amp; L'mington)


Kimball, Marcus
Neave, Airey
Smith, John (London &amp; W'minster)


Kirk, Peter
Nicholls, Sir Harmar
Speed, Keith


Kitson, Timothy
Noble, Rt. Hn. Michael
Stainton, Keith


Knight, Mrs. Jill
Norwood, Christopher
Steel, David (Roxburgh)


Lambton, Viscount
Nott, John
Stodart, Anthony


Lancaster, Col. C. G.
Onslow, Cranley
Stoddart-Scott, Col. Sir M.


Lane, David
Orr, Capt. L. P. S.
Summers, Sir Spencer


Langford Holt, Sir John
Orr-Ewing, Sir Ian
Tapsell, Peter


Lawler, Wallace
Osborn, John (Hallam)
Taylor, Sir Charles (Eastbourne)


Legge-Bourke, Sir Harry
Page, Graham (Crosby)
Taylor, Edward M.(G'gow,Cathcart)


Lewis, Kenneth(Rutland)
Page, John (Harrow, W.)
Taylor, Frank (Moss Side)


Lloyd, Ian (P'tsm'th, Langstone)
Pardoe, John
Temple, John M.


Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Pearson, Sir Frank (Clitheroe)
Thatcher, Mrs. Margaret


Lloyd, Rt Hn. Selwyn (Wirral)
Peel, John
Thorpe, Rt. Hn. Jeremy


Longden, Gilbert




Lubbock, Eric
Percival, Ian
Tilney, John


McAdden, Sir Stephen
Peyton, John
Turton, Rt. Hn. R. H.


MacArthur, Ian
Pike, Miss Mervyn
van Straubenzee, W, R.


Mackenzie, Alasdair(Ross&amp;Crom'ty)
Pink, R. Bonner
Vaughan-Morgan, Rt. Hn. Sir John



Pounder, Rafton
Vickers, Dame Joan


Maclean, Sir Fitzroy
Powell, Rt. Hn. J. Enoch
Waddington, David


Macleod, Rt. Hn. lain
Price, David (Eastleigh)
Wainwright, Richard (Colne Valley)


McMaster, Stanley




Macmillan, Maurice (Farnham)
Prior, J. M. L.
Walker, Peter (Worcester)


McNair-Wilson, Michael
Pym, Francis
Walker-Smith, Rt. Hn. Sir Derek


McNair-Wilson, Patrick (NewForest)
Quennell, Miss J M.
Wall, Patrick


Maddan, Martin
Ramsden, Rt. Hn. James
Walters, Dennis


Marples, Rt. Hn. Ernest
Rawlinson, Rt. Hn. Sir Peter
Ward, Christopher (Swindon)


Marten, Neil
Renton, Rt. Hn. Sir David
Ward, Dame Irene (Tynemouth)


Maude, Angus
Rhys Williams, Sir Brandon
Weatherill, Bernard


Maudling, Rt. Hn. Reginald
Ridley, Hn. Nicholas
Wells, John (Maidstone)


Mawby, Ray
Ridsdale, Julian
Whitelaw, Rt. Hn. William


Maxwell-Hyslon, R. J.
Rippon, Rt. Hn. Geoffrey
Wiggin, A. W.


Maydon, Lt.-Cmdr. S. L. C.
Robson Brown, Sir William
Williams, Donald (Dudley)


Mills, Peter(Torrington)
Rodgers, Sir John (Sevenoake)
Wilson, Geoffrey (Truro)


Mills, Stratton (Belfast,N.)
Rossi, Hugh (Hornsey)
Wolrige-Gordon, Patrick




Wood, Rt. Hn. Richard


Miscampbell, Norman
Royle, Anthony
Woodnurt, Mark


Mitchell, David (Basingstoke)
Russell, Sir Ronald
Worsley, Marcus


Monro, Hector
St. John-Stevas, Norman
Wright, Esmond


Montgomery, Fergus
Sandys, Rt. Hn. D.
Wylie, N. R.


Morgan, Geraint (Denbigh)
Scott, Nicholas
Younger, Hn. George


Morgan-Giles, Rear-Adm.
Scott-Hopkins, James



Morrison, Charles (Devizes)
Sharpies, Richard
TELLERS FOR THE AYES:


Mott-Radclyffe, Sir Charles
Shaw, Michael (Sc'b'gh &amp; Whitby)
Mr. R. W. Elliott and


Munro-Lucas-Tooth, Sir Hugh
Silvester, Frederick
Mr. Jasper More.

Resolved,
That the Prices and Incomes Act, 1966 (Continuation of Part II) Order 1969, a draft of which was laid before this House on 8th December, be approved.

BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on Consideration of the Lords Amendment to the Ulster Defence Regiment Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[The Prime Minister.]

RESTRICTIVE TRADE PRACTICES (INFORMATION AGREEMENTS)

10.15 p.m.

The Minister of State, Department of Employment and Productivity (Mr. Edmund Dell): I beg to move,
That the Restrictive Trade Practices (Information Agreements) Order, 1969, a draft of which was laid before this House on 26th November, be approved.
This is the first order which it is proposed to make calling up certain classes of information agreements under the provisions of the Restrictive Trade Practices Act, 1968. After the introduction of the 1956 Act, which had the object of preventing harmful restrictive trading agreements, it was found in practice that even though the undesirable types of restrictive agreement, such as those under which competing firms agreed on the prices which they would charge, were satisfactorily dealt with and, for the most part, abandoned, in some cases they were being replaced by a new type of agreement, the price information agreement. Under this, companies might agree to keep each other informed about the prices they were charging or the price increases they proposed to make without any actual obligation on the firms to charge the same prices or make the same price increases.
Very often, however, price information agreements of that kind could have much the same effect in reality as a straightforward price cartel. Because there was the possibility that the whole object of the 1956 Act could be circumvented by agreements to exchange information about prices or other aspects of companies' business, the Government took powers in the 1968 Act to call up, by order, a wide range of agreements of that kind.
With that background, I should like to explain the content and effect of the draft order which is before the House. The 1968 Act gave the Board of Trade—and now, since the transfer from that Department of its functions in relation to monopolies, mergers and restrictive practices, the Department of Employment and Productivity—the power to make an order calling up information agreements relating to many different matters—prices, terms and conditions of sale, costs,

quantities and descriptions of goods produced, processes of manufacture, persons supplying or acquiring goods and areas or places in which goods are supplied.
It has been decided, however, to confine the first order to a much narrower field of agreements than that. It will only call up for registration agreements relating to prices and terms and conditions of sale. These are the types of information agreement which can be used most directly as a substitute for price-fixing agreements.
Although the order is narrow, that does not mean that the order-making power under the 1968 Act is exhausted. It may be that in the light of experience we shall find it necessary to make further orders later—for example, dealing with the exchange of information about costs, which can also be used as a near substitute in some cases of price-fixing agreements.
I have referred particularly to the decision not to call up cost information agreements at this time because this explains a point of drafting to which I should like to draw attention. The order is so framed as not to make registrable at present information agreements for the exchange of information between buyers about the prices which they have paid or are being called upon to pay. This is clearly in character much closer to cost information and to be considered in the context of any order relating to costs rather than in this order.
The most important feature of the order is the Schedule which sets out the agreements to be excluded from the general call up of information agreements relating to prices and terms and conditions of sale. This may appear complicated but it is intended to achieve common sense and desirable results.
We have always recognised that even in the class of price information agreements there are certain categories of agreement which are desirable and even clearly beneficial in the national interest. The objective in drafting the order has been as far as possible to exclude beneficial categories of agreement from call up. In drafting these exclusions we have benefited from the very extensive consultations which we have had with industry, the C.B.I. and trade associations. As the Act required we published, in February last, a notice of the matters which we intended to cover in this first order,


and have studied very carefully the representations which we received in response to this. I should like to try to say briefly what the effect of the more significant exclusions contained in the Schedule is intended to be.

Mr. John Page: Before the hon. Gentleman leaves that point, can he tell us a little more about what the attitude of the trade associations and those with whom he had discussions disclosed—whether it was favourable or unfavourable to this new order?

Mr. Dell: The hon. Gentleman will, no doubt, remember that the notice as first given had included the proposal to include costs in the call up of information agreements. As a result of the representations which were made on that specific point we have now omitted costs. I therefore have the impression, though, of course, I cannot speak for any trade association or the C.B.I. with whom we also consulted on this matter, that their attitude to this order is far more favourable, at any rate, than it would have been had we decided to include costs in the form in which we originally intended so to do
I should like to say briefly what the effect of the more significant exclusions contained in the Schedule is intended to be, but I should emphasise that industry will have to look at the actual wording of the order, and my explanations will necessarily at some points have to oversimplify the effect of the exclusions.
First of all, the draft order excludes information agreements relating to exports. Without this exclusion industry would find itself obliged to deposit with the Department of Employment and Productivity all export information agreements under the special provisions relating to exports in the 1956 Act.
Secondly, we are excluding information agreements which are needed in connection with the supply of statistical or other information to Government Departments and other public authorities. This is, of course, because we do not want to upset arrangements for the collection of valuable statistical information or for consultation between industry and Government.
Thirdly, where information is already public or is being collected with a view to publication and not for the private

purposes of the firms concerned we consider that it would not be sensible to require the agreements involved to be registered.
Fourthly, there are same unavoidably complicated provisions to ensure that information agreements which are incidental to types of restrictive agreement which are themselves exempt from registration under the 1956 Act do not become subject to registration as a result of this order.
Fifthly, there are provisions relating to the rather special positions of the agricultural marketing boards and the nationalised gas and electricity industries.
Finally, it may be useful to say what the obligations will be of parties to the information agreements covered by this order when it is made. The intention is that the order should, subject to the approval of Parliament, come into operation on 1st February, 1970. This date rather far ahead has been chosen so that there can be, it is hoped, time between the making of the order and its operation for industry to become fully aware of the provisions of the order and to consider its effects on existing agreements. When the order comes into operation the agreements existing at that time will have to be registered with the office of the Registrar of Restrictive Trading Agreements within three months from that date. The Registrar, when the agreements are registered, will consider, for each agreement, whether the provisions of it are or are not of such significance as to call for investigation by the Restrictive Practices Court. If the provisions are not significant the Secretary of State will be able on a representation from the Registrar to give a direction that the agreement should not be referred to the Restrictive Practices Court. Otherwise the agreements will be examined by the court in due course, and they are deemed to be contrary to the public interest unless the court is satisfied that there is justification for the agreement in terms of the public interest in the circumstances of the particular case under one of the heads set out in the legislation.
I have mentioned this to show that registration does not mean that the agreements are automatically condemned. Indeed, I know that the Registrar considers it important that public money and the time of the court should not be


wasted on unnecessary references where an agreement is not likely to cause detriment to the public or any section of it.
The order represents a further important step in the effort under the restrictive practices legislation to bring to an end types of agreements in industry which are harmful to the public interest because they distort or prevent competition. With the explanation I have given of the content and effect of the order. I invite the House to give approval to the draft order laid before it.

Mr. John Page: Before the Minister sits down may I ask for clarification? I quite understand that competing firms are not to tell each other what their price structure is to be, but does paragraph 3(2) mean that a firm, when it sells or offers goods for sale, is not allowed to issue a suggested price structure for the wholesale and retail sales of its goods by firms to which it has sold them?

Mr. Dell: No.

10.27 p.m.

Mr. Dudley Smith: In essence this order stems from the Restrictive Trade Practices Act of 1956, which was passed when most of us who are taking part in the debate tonight were not Members of the House. As we have been reminded, it is the first order which relates to Section 5 of the 1968 Act, which itself stemmed from the Act of 1956.
May I thank the Minister of State for his explanation of a somewhat technical document? I think we on this side are prepared to give the order a guarded welcome, though I understand that some of my hon. Friends who have specific points to put may be a little less enthusiastic, particularly because they fear that the order may have an adverse impact on small businesses.
I suppose I should declare a technical interest on this of all days when hon. Members interests have featured in a report. I am employed in industry in my activities outside the House, although I have no involvement whatever in information agreements. My activities in industry have, however, brought me into professional contact with a number of well-known and highly reputable trade

associations, and I shall in a moment mention their relation to this order.
On restrictive practices of the type attacked by the order we on this side of the House have always seen the main problem as one of reconciling the beneficial results which can flow from the exchange of legitimate information between companies, and the undoubted fact that the intention of the 1956 Act was in many cases being undermined by the arrangements which some industries made for the exchange of information, particularly where prices are concerned.
It is worth recalling two paragraphs of the White Paper which was published by the last Conservative Government in 1964. On information agreements, paragraph 31 of the White Paper on Monopolies, Mergers and Restrictive Practices (Cmnd. 2299) reads as follows:
Many exchanges of information between firms can be beneficial. Comparisons of costs can, for example, be used as a means for enabling levels of productivity to be raised. Agreements for the exchange of technical information may lead to the development of new methods and processes. The Government welcome such arrangements, and intend to see that nothing is done to impede their operation and extension.
32. But the Government are not prepared to see the intention of the 1956 Act undermined by agreements or arrangements for the exchange of information the purpose and effect of which is to limit competition. They therefore propose to bring information agreements within the scope of the 1956 Act, and thus to make them registrable and subject ultimately to consideration by the Court.
It is interesting to note that that was back in 1964, and it has taken nearly six years for this first order to be brought before the House.
It is the wish of all of us that this measure should go a long way towards catching arrangements which are designed to restrict genuine competition. At the same time, I hope that the Department of Employment and Productivity and the Registrar will exercise their powers under Section 9(2) of the 1968 Act as carefully as possible, so as not to inhibit the exchange of useful information which is in no way harmful to the public.
In reading the reports of the debates which took place on the Second Reading of the 1968 Act, I was particularly attracted to one quotation from my hon. Friend the Member for Wanstead and


Woodford (Mr. Patrick Jenkin) when he said:
Surely what is important here is that the mere provision of information is a perfectly harmless activity. What is damaging to the economy is the misuse of that information."— [OFFICIAL REPORT, 30th April, 1968; Vol. 763, c. 1027.]
This order primarily affects trade associations, and I am sure that the Department was right to allow a period longer than the statutory period for representations to be made by interested parties. It is also encouraging to know that they paid heed in a number of respects to those representations. I am sure that the Minister of State will be the first to recognise that the trade associations will need guidance in what could be a difficult situation for them, and I hope that the Department of Employment and Productivity will be prepared to give it.
Trade associations are nearly always a power for good in industry and commerce. They help to raise and maintain standards in their industries. They encourage the weaker brethren in their ranks; they also keep them up to the mark, which is an important point, and they help to promote a responsible and statesmanlike approach.
I am sure that nobody here tonight wishes to construe this order as an attack on trade associations. I do not believe that is the intention. They have a difficult role as a collective agent for their particular membership. These associations have, as a general rule, become constructive and forward-looking in their attitude, particularly over the last decade or so, and have often provided a useful bridge between Government and industry—one which is appreciated on both sides, and which is vitally important.
I know that these associations, from talks that I have had with some of them, are very glad that the Department has decided to exclude information agreements about costs, at least at this stage. Mostly, I submit, these particular agreements are unobjectionable and they can be a valuable aid to efficiency and more competitive prices. The Minister has given more than a hint tonight that they may form the basis for another order in due course. I hope he will look at this carefully before he brings one forward, because many of us on these benches will be far less happy about that sort of

order than we are about the one which is before us tonight.
Trade associations will also be pleased that the order is obviously designed to allow them to continue to some extent to collect information for statistical purposes, which can also be beneficial to the public interest.
I wish to ask the Minister to clarify paragraph 2(c) of the Schedule. Does this mean that it will be possible for trade journals to publish information on prices and costs subject to the provisions of the Act without recourse to the Registrar? I am wondering what the situation is where trade journals are concerned. As we know, they are often freely available to the Press. They might in certain circumstances be available to members of the public, and I am wondering how far prohibition of publication goes where these trade journals are concerned.
One leading trade organisation has also expressed to me considerable uncertainty about the scope of paragraph 2(b)(i) of the Schedule. That trade organisation thinks it would be helpful to industry if the Minister could explain the intended scope of that paragraph. In my view, it is far from clear and it would be useful to mention it.
There is also the question of what happens where an order is called up by the Registrar. While it is under consideration and before the hon. Gentleman's Department declares that it is unobjectionable, or if the Restrictive Trade Practices Court pronounces a decision to the contrary, is the information agreement allowed to be continued? I am sure that it must be allowed to go on until a definite decision has been made, but it would be valuable if we could have the Minister's confirmation.
I think it is fair to say that we on these benches give the order a qualified welcome. If it is applied liberally and sensibly it can be a useful spur to competition. But if it is interpreted oppressively it will earn the resentment of industry. I urge the Department to see how it works out before rushing forward with further orders under the same heading. We need a period of trial to see how it plans out.
I am sure that there is no intention to be illiberal about the interpretation of


the order, but we must give notice to the Government that we shall watch closely to see how it operates in practice, and, if we think it necessary, we reserve the right to make alterations when we are sitting on the benches opposite.

10.35 p.m.

Mr. Charles Fletcher-Cooke: The Minister trails a few clouds of glory, having come from the Board of Trade, and he will, therefore, understand the importance of competition and unrestrictive practices as opposed to the Department in which he is now a captive where he is absolutely in laocoon toils of restrictive practices and unable to move in any direction.
I give a rather warmer welcome to the order than my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith). If we will the means, we must will the end. There is no doubt that the order follows through the great corpus of anti-restrictive trade practices that both parties have adopted—in my view, quite rightly—for more than 25 years.
The order is a somewhat blunt instrument. It condemns information agreements, but in enormous schedules in enormously small print it makes exceptions. I suppose that this is one way of legislating. I do not know why, as my hon. Friend said, gas, electricity and agriculture should be excepted. What is there about those occupations or the nationalised industries that makes them not susceptible to the same kind of rigorous treatment that we mete out to other industries? Why should they be excepted?
Information agreements are "arrangements" in the sacred word of the principal Act of 1956. Arrangements are condemned by the 1956 Act, and quite rightly so. Information agreements too often, whether in the form of recommendations by trade associations or over lunch in the golf club on Sundays, or whatever it may be, have been the nonbinding legal equivalents of a legal restrictive practice. I have always condemned them.
I believe that they have been responsible for the enormous surgence—not resurgence, but surgence — of the capitalism of the United States of America. They have adopted an even

stronger view than the order purports to propose. The United States have adopted criminal sanctions—and so has Canada —for this kind of activity. I am an unredeemed apostle of that doctrine. I believe that it is important to make capitalists compete. It is not an easy task to make capitalists compete, because they do not wish to compete when it comes to the crunch. The purpose of this House and of the community is to force them to do so. Therefore, I welcome the order.
In England, there is a psychological desire not to compete because it is thought to be ungentlemanly, against the code, or somehow beastly and anti-public school tradition. Nevertheless, I believe strongly in competition and, therefore, I welcome the order.
But what I do not understand is why there should be this enormous number of exceptions—three pages of close print—relating to agreements to which the order does not apply. This requires enormous justification by the Minister. He has mentioned gas, electricity and agriculture. I find no reason in principle why they should be excluded. There are many other exceptions in the order. Why should not they compete?
I believe that in philosophy this is a good order, but I do not like it in the sense that so much is taken out of it on political grounds of a very meagre and minor kind. Apart from that, I hope that we shall adopt it tonight.

10.41 p.m.

Mr. Tom Boardman: I, also, support the objective of attempting to create a more competitive society—something which hon. Members on this side of the House welcome. To that extent I go along with my hon. Friends in the blessing they have given to the order. But I have some doubts about its effectiveness, because the control of prices alone is only one part of the equation. The Minister will remember that when the Bill was in Committee we had long debates on this aspect of the problem. Too much concentration on price alone tends to conceal the other elements that go to make up a competitive society—the quality of goods, specifications, deliveries, service, and so on. These are also important.
I realise that the order is intended to avoid too many complexities in applying


solely to prices, but I hope that it will not lead people to believe that prices are the only things that matter.
I share the fears of my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) about some of the obscurities in the Bill, and particularly the reference to paragraph 2(b) of the Schedule. I had a letter from a distinguished firm of solicitors who specialise in these matters who, referring to this Schedule, said:
This exception is of fuliginous obscurity and must be clarified because it is at present unintelligible.
Although we cannot amend the order I hope that we can have some explanation of what it is intended to convey.
There are also some irrelevancies in the order—the reference to restrictions on registered agreements relating to past prices. I wonder whether this is an entirely necessary exercise, particularly when there is such a wide range of exceptions. There is also the peculiar point that the terms of the order can be largely avoided by the publication of a catalogue. Perhaps the Minister will confirm that the mere publication of a catalogue of prices, which is available to those who ask for avoids the necessity for any agreement to exchange prices having to be registered. I understand that that is a correct interpretation of the position.
I have some doubt about the exclusion of prices relating to exports. I do not accept that the export trade is a completely different animal from any other type of commercial business. We should not kid ourselves that because somebody seeks to export he need not be as competitive as those dealing in the home market. He must be more competitive. I wonder whether any damage would be done to our export industry by applying the same spotlight of registration, if needed, to competition in that field, just as it is applied elsewhere.
With those reservations, I share my hon. Friend's support for the order.

10.45 p.m.

Mr. John Page: As the only amateur here tonight, I wish to ask one rather simple question, the answer to which I expect all other hon. Members know. It is in connection with Section 9(2), which provides that

the Board of Trade, upon the representation of the Registrar, that the relevant restrictions…are not of such significance as to call for investigation by the Restrictive Practices Court,…may give directions discharging the Registrar from taking proceedings…
I believe that a number of trade associations are worried about the costs which they may have to bear if their case is taken to the Court.

Mr. Deputy Speaker (Mr. Harry Gourlay): Order. I am not sure that the hon. Gentleman's point is related to the order. He cannot ask questions on the principal Act unless it refers to the order.

Mr. Page: I believe that it refers to the order. If I am out of order, I will finish by saying only a few more words.
Under the provisions of the order, would it be possible for a test case to be put to the Registrar to ascertain whether it would be "of such significance" before an official application for registration is made?

10.46 p.m.

Mr. Dell: I am a little sorry that the order was given such a qualified welcome by the hon. Member for Warwick and Leamington (Mr. Dudley Smith). I much preferred the full-blooded approach of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), which appeared to be very much in line with that portion of the 1964 White Paper on monopolies and mergers policy which the hon. Member for Warwick and Learning-ton read out. This is an advance in producing a more competitive economy and should be welcomed as such—welcomed more warmly than it was by the official spokesman for the Opposition.
The hon. Member for Harrow, West (Mr. John Page) said that he was the only amateur present. I must at once profess not to be a lawyer. Therefore, I must be careful in any words I use in interpretation of what is, I confess, a very complicated document, which includes paragraphs which it takes some knowledge of the subject to interpret.
The hon. Members for Harrow, West and for Warwick and Leamington raised questions about Section 9 of the 1968 Act. The hon. Member for Warwick and Leamington wished me to give an assurance that the powers under Section 9 would be used sensibly. The hon.


Member for Harrow, West indicated the worry of certain trade associations regarding the costs which can result from defending restrictive trade agreements before the Restrictive Practices Court.
I understand that worry. He must recgonise that that type of worry which was implicit in the decision taken in 1956 to proceed against restrictive agreements by a judicial method. If an agreement is to be defended, if an attempt is to be made to argue that any restrictive agreement should be permitted under one of the gateways in the 1956 Act or the additional gateway relating to restrictions that have no material effect in the 1968 Act, it costs money, as do processes of law in Britain. However, as I said earlier, the Registrar is fully apprised of this point. He is ready to take full advantage of the powers of representation given to him by Section 9 of the 1968 Act, and I am sure that he will make representations in respect of information agreements which he does not think to be of great significance.
May I again, not just in relation to Section 9, but in relation to the point made by the hon. Member for Warwick and Leamington that trade associations would need guidance, make a point which I made repeatedly during the passage of the 1968 Bill. The Registrar is available to discuss these matters with people who wish to consult him, and I recommend those who find difficulty in interpreting the law, or in understanding exactly what the situation in relation to their agreements, actual or proposed, may be under the law, to consult him. Obviously, even he is not an absolute interpreter of the law, but he can give them guidance.
The hon. Member for Warwick and Leamington warned me about going further from this order and returning to the subject of costs. The hon. Gentleman thinks that many such agreements can be beneficial. We have accepted that many price agreements can be beneficial, and this is the reason for the long list of exclusions referred to by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). I gave certain assurances in Committee that we would do our best—we could not do it absolutely—to draft an order which would avoid, in

so far as it was humanly possible, beneficial agreements having to be registered, and this is the complicated result of the pledge, which I hope I have fulfilled. I am sorry that it has been necessary to make all these exemptions, but this was the only way in which I could fulfil that pledge.
On the question of costs, all that I say to the hon. Member for Warwick and Leamington is that we shall watch the operation of this Order very carefully. We are in no way abandoning the powers that we have under the 1968 Act, and if necessary we shall return to that matter. If and when we return to it, we shall have to go through the processes of notification and consultation that we have gone through in respect of this order.
The hon. Gentleman also asked me about publication in trade journals. Paragraph 2(c) of the Schedule exempts information agreements relating to information
which has already been published in such manner that it is readily available to persons who are or may be purchasing goods…of descriptions to which the information relates…".
If an information agreement is to be justified by publication, then the publication must be generally available.
The hon. Gentleman also asked about the scope of paragraph 2(b)(i) of the Schedule. Indeed, reference was made to the complexity of the wording of the paragraph as a whole. Perhaps I can give the House some guidance on this. This exclusion is intended principally to allow trade associations to carry on their representational functions. It allows them to collect information from their members, to process it, and present it to Government Departments and public authorities. They may wish to do this because, for example, they are making a case for a change in the tariff, for on anti-dumping duty, or for a change in taxation. There obviously must be some safeguard to prevent associations nominally collecting information for some public purpose but in reality for circulation of price information among their members.
Accordingly, the exclusion prevents a trade association from circulating information about particular firms' prices, and as a further safeguard prevents any information collected for submission to a


public authority being circulated unless the Government Department has asked in writing for the information to be provided to it. In the bona fide case, for example, of an anti-dumping application, there should be no difficulty about the Government Department formally indicating that it requires information essential to consideration of the application. The hon. Gentleman also asked whether people could continue to act on agreements which once registered had not been brought before the court. They can continue to operate them until they are brought before the court.
The hon. and learned Member for Darwen put certain questions. I am delighted that he finds in me some grace in that I came to the D.E.P. from the Board of Trade. I hope that some of this grace might in his eyes be cast upon the D.E.P., but evidently not yet. He asked why gas and electricity are exempted. These organisations are exempted because they are part of one organisation and, therefore, it would be absurd not to permit information agreements between them.
The hon. and learned Gentleman also asked about the agricultural provisions in paragraph 4 of the Schedule. This provision is needed because at the time the provisions of the Agricultural Marketing Acts bearing on restrictive agreements of the Board were drafted, the 1968 Act had not been passed. The effect of this paragraph, therefore, is to exclude from the call up any information agreements made by a Marketing Board before 1st February, 1970—when the order comes into force—unless the Minister of Agriculture gives the necessary certificate. The hon. and learned Gentleman may say that, nevertheless, this does not deal with the principle that agriculture should be absolutely covered by the order. All I can say is that that is not the view we have taken.

Mr. Fletcher-Cooke: Is the hon. Gentleman really proud of the result of the exemption for agriculture in view of the condition of agriculture which was exemplified by the demonstrations yesterday?

Mr. Dell: I will content myself by replying that I am proud of the order. The hon. and learned Gentleman asked why there are so many exemptions. If he studies the rather longer than usual explanatory memorandum, he will see that these exemptions are necessary to exempt the useful information agreements to which I referred earlier.
The hon. Member for Leicester, South-West (Mr. Tom Boardman) holds the view that export prices should not be excluded. Their exclusion is in the tradition of the Restrictive Trade Practices Act, 1956, as well as of the present Act. I know his view, but I think that, in the light of the representations we have received and of our own judgment, it is sensible to continue this type of exemption. I think that, in any event, these agreements would probably be found to be beneficial to the economy rather than otherwise. The hon. Gentleman asked whether publication of catalogues of prices is adequate. It is. I think that is the answer which he got from reading the order.
I hope that, with this further explanation of the order, the House will be prepared to support it.

Mr. Fletcher-Cooke: By leave of the House, I would like to say how glad we are to have for once a Minister who has really answered all our queries. It is a nice change and I congratulate the hon. Gentleman.

Question put and agreed to.

Resolved,
That the Restrictive Trade Practices (Information Agreements) Order 1969, a draft of which was laid before this House on 26th November, be approved.

Orders of the Day — ULSTER DEFENCE REGIMENT BILL

Lords Amendment considered.

Clause 1

ESTABLISHMENT AND STATUS OF ULSTER DEFENCE REGIMENT

Lords Amendment No. 1: In page 2, line 7, at end insert:
but save as aforesaid references in that Act to the regular forces shall not include references to the force".

11.0 p.m.

The Under-Secretary of State for Defence for the Army (Mr. Ivor Richard): I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a clarifying Amendment which arose out of an undertaking given by my noble Friend Lord Winterbottom in another place during the Committee stage of the Bill there on 11th December.
Hon. Members who were here throughout that long night of the Committee stage in this House will remember that, at 8.22 in the morning, the hon. Member for Beckenham (Mr. Goodhart) asked whether or not the description used in the Bill, "regular forces", included members of the Ulster Defence Regiment. I said in Committee that it was the intention of the Government that the call out powers for the force, or any part of it, should be confined to members of the Regular forces. I said:
…and that means that someone who holds a Commission merely by virtue of his membership of the Ulster Defence Regiment will not be one of those persons authorised within the meaning of the Clause".—[OFFICIAL REPORT, 1st December 1969; Vol. 792, c, 1236.]
The need to amend the Bill to fully reflect the intention of the Government arises because Clause 2(1) provides that the authority to call out the force for emergency service may be granted to officers
…of the regular forces within the meaning of the Army Act 1955…
Meanwhile, the Army Act defines the expression "Regular Forces" in Section 225(1), as

…any of Her Majesty's military forces other than the Army Reserve, the Territorial Army"—
now the TAVR—
and the Home Guard".
It does not, and would not without the Amendment, exclude, in terms, the Ulster Defence Regiment. But the regiment would be part of Her Majesty's military forces, for Clause 1(2) says:
Members of the force shall be members of the armed forces of the Crown…".
It could be argued—though this is not conclusive—that the reference to officers of the Regular forces in Clause 1(2) includes—to be more precise, does not exclude—officers of the Ulster Defence Regiment. That, clearly, was not the intention of the Government and the Amendment would, if it be necessary—there is some doubt about whether it is strictly necessary—clarify the position and make the effect of the provision beyond doubt.
The Amendment achieves the precision which is demanded in the present state of the Bill and the call out arrangements will be confined, as was the intention of the Government, to members of the Regular forces; and that means that someone who holds a Commission merely by virtue of his membership of the regiment will not be one of those persons authorised within the meaning of the Clause.

Mr. Philip Goodhart: While I am glad that my interpretation of the Bill as originally drafted has been vindicated in another place, I am not glad that the Government have seen fit to amend it to make it absolutely clear that Clause 2 fits their own interpretation.
The Amendment confirms the Government's intention that officers who are second in command of battalions will have substantially greater powers than those given to the unit's commanding officer in that the second in command will have power to call out the men while the commanding officer will not.
Can the Minister think of any other regiment in any other army in the world in which the second in command is given legal powers greater than those given to the commanding officer? This seems a very Irish arrangement in the worst sense of the word and I hope that it does not cause the difficulties that I foresee.

Mr. Kevin McNamara: I welcome the tightening-up introduced by this Amendment, though I regret that the only Amendment to the Bill accepted by the Government comes from the other place. It is a good Amendment, but there were many Amendments which we sought to make here which would have added greatly to the precision which my hon. Friend the Under-Secretary of State seeks. Unfortunately, we cannot go into the merits of those matters now.

Dr. M. S. Miller (Glasgow, Kelvin-grove): Try it.

Mr. McNamara: The temptation is great, but knowledge of your impending righteous indignation, Mr. Deputy Speaker, prevents me.
I welcome the Amendment because it clears up a difficulty which was of some concern to hon. Members when the regiment was being debated. I put just one question to my hon. Friend. What happens in regard to an officer in the U.D.F. who is a volunteer, but on the regular reserve and who has reached field rank as a major? Would he have this power or not? This is of some importance, considering the great number of people carrying military titles who live in Northern Ireland.

Mr. Roy Roebuck: Not titles, ranks.

Mr. McNamara: Yes, ranks.
I am told by my hon. Friend the Member for Belfast, West (Mr. Fitt) that when he goes to the Stormont he is not sure whether he should salute or bow to the Government party. Bow he certainly does not, and "salute" would not be the way to describe the gestures which he sometimes makes.
The whole situation is made a nonsense by the provision as it will now stand. The second in command of a battalion will have greater powers than the commander. Certain officers who hold the Queen's commission are not completely trusted in the exercise of their power. A regular unit in certain matters is completely irregular, and an irregular unit in certain matters is completely regular. Finally, the regiment has in its title the name of an area in one-third of which it is not allowed to operate.
It makes the situation rather ridiculous. Although we welcome the spirit of the Amendment, since it goes some way to meet some of the objections raised to the regiment and brings a little of the greater precision which we want, establishing the principle that power is vested in the G.O.C. through the Secretary of State for Defence, we can only regard it as a second-best way of dealing with the B Specials.

Captain L. P. S. Orr: The Amendment shows the danger of talking too much. It is possible that, if my hon. Friend the Member for Beckenham (Mr. Goodhart) and I had not raised the matter in Committee, we should not have this Amendment from another place, and it might have been at least possible that the anomaly it raises would never have arisen.

Mr. McNamara: I assure the hon. and gallant Gentleman that, the first time this matter was raised in a room upstairs, this was the first obvious anomaly pointed out to the Government.

Captain Orr: I am not sure what the hon. Gentleman means. As I remember it, the matter was raised by my hon. Friend and myself when we asked, in Committee here, what would be the position of the battalion commanders. It appeared to us that an anomaly existed in that the second in command of a battalion could exercise powers which were not open to the battalion commander.

Mr. McNamara: We recognised the anomaly when we discussed the matter upstairs, but, in the circumstances, we were quite happy about it.

Captain Orr: Yes, I accept that from the hon. Gentleman. Of course, the hon. Gentleman is happy about any anomaly in the regiment, which he does not really want to see get off the ground. The more anomalies the more satisfied he will be.

Mr. McNamara: With the greatest respect—

Mr. Deputy Speaker (Mr. Harry Gourlay): Order. The hon. Gentleman's interventions are inclined to lead the hon. and gallant Member off the Amendment before the House. I hope that he will not stray too far.

Mr. McNamara: On a point of order. With the greatest respect to you Mr. Deputy Speaker, the hon. and gallant Gentleman will recall that he joined with me in the spirit of my Third Reading speech, urging members of the minority—

Mr. Deputy Speaker: Order. We are not this evening discussing the Committee stage or the Third Reading of the Bill. We are discussing the Lords Amendment.

Captain Orr: This is very difficult to say without infringing the rules of order, but, of course, I accept that the hon. Gentleman's guilt is solely by association. I accept that his intervention tonight was solely on that Amendment. He said, and I hope that the Minister will repudiate this, that the Amendment reflected the opinion, at least of himself, and he hoped, the Government, that those who were to become battalion commanders in the new force were people who were not to be trusted.

Mr. McNamara: With the greatest respect to the hon. and Gallant Gentleman, I think that you are misrepresenting me. You are—

Mr. Deputy Speaker: Order. The Chair is not misrepresenting anyone.

Mr. McNamara: With respect to you Mr. Deputy Speaker, the hon. and gallant Gentleman is misrepresenting the very point I was making. I imputed no motive to the Government. All that I was saying was that it seemed to bear out my feeling about battalion commanders and what we think of them in terms of the way that they have acted during recent trouble in Londonderry.

Captain Orr: The hon. Gentleman has made my point. I am not misrepresenting him. What he is saying is that if the Government carry out the recommendation of the Hunt Committee, namely, that the existing county commandants and senior officers of the Ulster Special Constabulary should become the senior officers and the battalion commanders of the new force, then they are people who ought not to be trusted. He thinks that the Amendment is good because it deprives them of the power to call out the battalion under their command, except with the consent of their regular second in command.
I hope that the Minister will repudiate that slur. If he does not it will make it exceedingly difficult for these senior officers, who have served the State well, to continue to join the new Ulster Defence Regiment and to carry out the duty for which the Hunt Committee thought them fitted. I hope that the Minister will say something about this.

Mr. Richard: May I say that I have cast no slur, that I have imputed no bad intentions and that I have cast doubt on no one's motives. All I have done is to clarify the point of law. That is all that this Amendment is about.

Captain Orr: With respect to the Minister, I am asking him to repudiate what his hon. Friend has said. I am entitled to ask the Minister this at any rate, whether he agrees with the Lords that it is not to be taken as any slur upon the county commandants and the present Ulster Special Constabulary, who may join the new force. If he will at least say that, I shall be perfectly content.

11.15 p.m.

Mr. Paul B. Rose: The hon. and gallant Member for Down, South (Captain Orr) seems to have made an assumption with which I should like my hon. Friend the Under-Secretary to deal. It is that county commanders will somehow automatically become commanders in the new force.

Captain Orr: I was merely quoting the Hunt Committee on this.

Mr. Rose: One of the purposes of the new force, and I remember moving an Amendment on this subject in Committee, when certain undertakings were given by the Government, is that it should be a balanced force. If it is to be balanced, there must be significant changes of commanders, and it would be quite wrong for the hon. and gallant Gentleman to assume that county commandants, as he calls them, of the B Specials will carry on into the new force.
If that happened, the whole underlying assumption of the new force would be called into question, and it would become unacceptable to those of us who have accepted it in a spirit of moderation. We would be placed in an impossible position if the new force were taken over entirely


by the people now in charge of the B Specials, as the hon. and gallant Gentleman is suggesting.

Mr. Deputy Speaker: We may not discuss the composition of the new force now. I hope that the hon. Gentleman will confine his remarks to the Lords Amendment.

Mr. Rose: I am confining my remarks to what was said by the hon. and gallant Gentleman. I ask for an undertaking from my hon. Friend that, while casting no slur on any the gentlemen involved, he will, at the same time, make it clear to the hon. and gallant Gentleman that at this time there is no certainty about who the commanders are to be and no certainty of the kind of automatic transfer implied by the hon. and gallant Gentleman.

Mr. Stanley R. McMaster: I support what has been said by my hon. Friend the Member for Beckenham (Mr. Goodhart) and my hon. and gallant Friend the Member for Down, South (Captain Orr). It must be obvious from the interventions of the hon. Member for Kingston upon Hull, North (Mr. McNamara) and the hon. Member for Manchester, Blackley (Mr. Rose) that, whatever the Under-Secretary may say, there is some doubt about the correct situation of this force.
We will have battalion commanders who are senior officers who, when they are serving, will be subject to the Army Act and yet not have the power themselves to call out this force, while junior officers, perhaps with only the rank of major will have the power—

Mr. Roebuck: May.

Mr. McMaster: May I accept the correction.
A major of the Regular Army may have the power and may be authorised by the Secretary of State to call out the force, whereas the battalion commander may not have the power. If this is to be a properly constituted part of the Army, senior officers should have exactly the same powers as any officer in the Regular Army and especially junior officers.
This Amendment is most unfortunate. It has already been noted by potential members of the force in Northern Ireland

and I have been asked questions about it in my constituency. I assure the Minister that it is not just a matter for this House, but one that has already caused some concern in Northern Ireland. I ask him to accept that, and perhaps to consider this point again.

Mr. Roebuck: My hon. Friend the Under-Secretary of State was a little hopeful when he suggested that the Amendment clarified the Bill. I do not think that I am alone in thinking that the clarification is not immediate. It has made an Irish situation even more Irish.
By way of seeing whether or not the issue is clarified, I would like to ask whether the Amendment makes any difference to the constitutional position with regard to the control this House has over the action of the Armed Forces. Down the centuries we have always exercised a very stringent control over the armed forces, and when the forces have ever been called out it has been necessary for the Executive to report that fact to the House forthwith.
But as I understand the Bill without the Amendment there is no statutory requirement for that to be done when the Ulster Defence Regiment or any section of it is called out.

Captain Orr: The Amendment makes no difference whatever to that.

Mr. Roebuck: I am not sure who is in charge of the Bill. I had suspected some time ago that it was the Ulster Unionist Party, but I hope that I am wrong in that. Perhaps my hon. Friend the Minister, if he is still with us after the rather curious associations he has had during the passage of the Measure, will be able to give me a rather different answer.
The point I am trying to make is that I understand that the effect of the Amendment is to make it clear that a section of the regiment can be called out only under the command of a Regular officer, that is, someone who is not a member purely of the Ulster Defence Regiment. Does that change the constitutional position? Does it mean that there is now imposed on the Secretary of State for Defence a duty immediately after some platoon is called out to report that fact to the House, and if the House is not sitting to seek to recall it, so that the matter can be re-reported to it?

11.23 p.m.

Mr. Richard: We have had a number of interesting speeches—

Mr. Deputy Speaker: Order. The hon. Gentleman must ask the leave of the House to speak again.

Mr. Richard: With the leave of the House, perhaps I may reply to the debate.
Only one question seemed to be directed to the Amendment, and that was by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara), who wanted to know the position of a Territorial Army officer. By Section 225(1) of the Army Act, 1955.
'regular forces' means any of Her Majesty's military forces other than the army reserve, the Territorial Army and the Home Guard,…".
Therefore, an officer who held Her Majesty's commission by virtue of two separate statuses, one in the Ulster Defence Regiment and one a reserve commission, would not be a member of the Regular forces within the meaning of Section 225, and so would not be a person under the Bill who would be entitled to be designated by the Secretary of State to call out the force.
I shall resist the temptation to go into matters of general policy raised by the hon. and gallant Member for Down, South (Captain Orr), the hon. Member for Belfast, East (Mr. McMaster) and my hon. Friend the Member for Manchester, Blackley (Mr. Rose), and the fascinating constitutional questions raised by my hon. Friend the Member for Harrow, East (Mr. Roebuck). The Amendment makes absolutely no difference to the constitutional position of anything. The constitutional position of the force, or indeed of my hon. Friend the Member for Harrow, East, is exactly the same as it was before another place amended the Bill, and it will be in precisely the same position if the House accepts the Amendment, as I trust that it will at this late hour and after this somewhat protracted and diffuse debate.
It is a clarifying Amendment. It does no more and no less than to nut into the Bill what was clearly, and was in Committee expressed clearly to be, the Government's intention. Therefore, all the interesting questions about whether we have cast a slur upon potential commandants or potential non-commandants

in the force, and whether, indeed, people in Ulster, or Northern Ireland, depending on whichever side of the House one happens to be for this purpose, feel either aggrieved or pleased by this position—none of that, it seems to me, has been altered one jot or tittle by the Amendment.

Mr. R. Chichester-Clark: Mr. R. Chichester-Clark (Londonderry) rose—

Mr. McNamara: Before my hon. Friend sits down—

Mr. Deputy Speaker: Mr. Chichester-Clark.

Mr. Chichester-Clark: Because of the terms of the Amendment, I thought that at one moment the hon. Member for Kingston upon Hull, North (Mr. McNamara) appeared to be casting something of a slur on county commandants. In view of the fact that no other responsible person, whatever may be felt about the special and general, has so far done this, I thought that the hon. Member would not wish to do so. Because, however, the hon. Lady the Member for Mid-Ulster (Miss Devlin) is not present, I am sure that the hon. Member would not wish to appear to act as her Parliamentary Private Secretary.

Hon. Members: Oh.

Mr. Deputy Speaker: Order. The hon. Member must relate his remarks to the Amendment.

Mr. Chichester-Clark: I wish to do that, Mr. Deputy Speaker, but I am sure, knowing the hon. Member, that he would not wish to give the impression—because I think that to some hon. Members he did—that he was casting such a slur.

Mr. McNamara: Mr. McNamara rose—

Mr. Deputy Speaker: Order. The hon. Member has exhausted his right to speak.

Mr. McNamara: On a point of order. I was under the impression, Mr. Deputy Speaker, that the hon. Member for Londonderry (Mr. Chichester-Clark) was giving way to me.

Mr. Deputy-Speaker: Order. The hon. Member could not be under that impression. I called the hon. Member for Londonderry (Mr. Chichester-Clark) to speak.

Question put and agreed to.

PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION

Mr. Arthur Probert discharged from the Select Committee on the Parliamentary Commissioner for Administration; Mr. Dennis Hobden added.—[Mr. Harper.]

INITIAL TEACHING ALPHABET

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

11.27 p.m.

Mr. John Tilney: Most of Britain will have been interested tonight in prices and incomes, yet history may say that this Adjournment debate was more important for future generations. The Schools Council Report quotes from the Plowden Report that teaching a child to read
is still…a major occupation since reading is a key to much of the learning that will come later".
Reading opens up new worlds of interest and delight. It stimulates imagination and invention, as did the first printed books to the few who had at that time the key to the meaning of the characters.
It is just an accident of history that the alphabet available to mediaeval clerics, who translated the Bible into the vulgar tongue, was the Latin one. It had only 23 characters. Its old monumental capital letters were increased later by three. English, however, has 40 sounds. How much easier it would have been for children throughout the last 500 years if there had been 40 alphabet characters. Instead, they have had to learn, with the upper and lower case ones, not to mention script or the multiplicity of sounds that single Latin letters can signify, about 2,000 characters used in traditional orthography. How much better to take this great hurdle against communication by stages. Hence, to me, the importance of the Initial Teaching Alphabet, or I.T.A.
I should like to pay tribute to this invention of Sir James Pitman, for many years the Member for Bath and grandson of the inventor of phonetic shorthand; also to Mr. Speaker, who, when he was a back bencher, saw the great possibilities which I have seen demonstrated in

schools in Liverpool and so became a member of the I.T.A. Foundation, a nonprofit-making body, as is the right hon. Member for Leyton (Mr. Gordon Walker).
The Report "I.T.A. An Independent Evaluation", by the late Professor Frank Warburton and Vera Southgate, and recently issued, is very clear and definite. I am sure that the House would wish to express to Mrs. Warburton and her family our sincere condolences on her husband's so sudden death. The report, which was
carried out for the Schools Council on the use of the initial teaching alphabet as a medium for beginning reading with infants
concludes, on page 277:
The experimental results so far obtained suggest very very strongly that I.T.A. is, in fact, a more efficient medium for teaching reading to beginners than traditional orthography. The magnitude of the differences found in its favour in many different researches is unusually high.
Moreover, following the publication of the Schools Council report, the National Foundation for Educational Research and the London University Institute of Education, commenting both on that report and on an earlier report, the I.T.A. symposium, concluded, also, that
the medium"—
that is, I.T.A.—
has substantial advantages over traditional orthography in the early stages of teaching children to read".
They then, calling attention to the role of research in determining policy,
urge teachers and others responsible for the important decision as to how and by what means reading should be taught, to examine the evidence and to recognise that on what they decide depends the welfare of countless children—especially those who now have difficulties".
We know, according to the literacy survey of the Inner London Education Authority, how backward are many of the children under the London Authority. What percentage of these are taught in traditional orthography? Children of immigrants elsewhere in Britain must be finding our spelling equally hard. How many infant schools in London now use I.T.A.? And what percentage is that of all London infant schools? Perhaps the Minister will say whether the I.T.A.-taught children in London are more literate at their particular age than their traditional orthography neighbours.


These are questions which need answering.
The great American nation has been so appalled by the social, economic and racial consequences of frustration and failure in learning to communicate that they have very recently adopted "The Right to Read—Target for the '70s" as a national enterprise. Should not this also apply to every child here? Yet, according to Dr. Joyce Morris, in "Reading in the Primary School", N.F.E.R. Publication No. 12, only a little more than half of the children go to their junior school after two and one-third years in the infant school having become successful readers—that is to say, capable of sustained and effective reading in traditional orthography. The other half do not succeed, and suffer greatly because of their inability, during the following eight years, to profit sufficiently from the potentially wonderful education provided for them. Those who, with I.T.A., learn to read, easily gain more than an extra educational year. They get years of pleasure with all the excitement of passing new frontiers.
I do not question the right of head teachers to decide on what alphabet their schools should begin, but I hope that they will all study the evidence both of reading in I.T.A. and making the transition to traditional orthography; yet that they will bear in mind that few people want to alter the traditional spelling of our English literature. Possibly head teachers ought to consider what their predecessors centuries ago thought about the sanctity of the Roman numeral when their attention was called to the new Arabic numbers. Perhaps, if they are doubtful about the value they ought to attach to research, they will attend on one day or two half days an I.T.A. workshop, and only after they have done so form their judgment.
In the meantime, may I ask the Minister what discussions she is having with the Scottish Office, the Secretary of State for Commonwealth Affairs over the British Council, the Defence Department over education in the Army, or the Home Department over illiterate prisoners?
I am no educationalist. I became interested in this new, or rather expanded, alphabet—because 24 of the traditional characters are retained—because I believe

that it is of British and ultimate world interest for there to be an international language, and that that language should be English. In many ways ours is an easy language. It has no genders and few cases, but its spelling is exceedingly difficult. I.T.A. makes that simple. Indeed, the experiments in Nigeria and recently in The Gambia are highly encouraging.
Is not it important that the literate masses overseas should also speak English? There is already a danger of a future Indian generation being unable to communicate with Australians because neither can understand the other's pronunciation of English. I.T.A. could automatically produce a really English tongue, which anyone in this House could understand at first hearing.
The report calls for more research. I.T.A. may not be the perfect answer, but, until a better one has been found which has been as well used and researched, should not it be adopted, so that more and more teachers may become experienced, and the researchers better able to decide what researches to attempt and more effectively to plan and carry them out? Finally, may I ask the Minister what she thinks of the report, and what action she intends to take on it?

11.36 p.m.

Mr. Patrick Gordon Walker: I think that you know, Mr. Speaker, why I am very glad to be taking part in the debate while you are in the Chair.
I should declare a past interest in this matter. Some years ago I was an adviser to the I.T.A. foundation, and in that capacity saw a good deal at first hand of the work of I.T.A. in the schools, and talked to a large number of teachers. I came to conclusions which seem to be borne out by the Warburton Report and the two statements which the hon. Member for Liverpool, Wavertree (Mr. Tilney) quoted from—the National Foundation for Educational Research and the London University Institute of Education. One of the main conclusions to which I came, and which now seems to be established, is that the I.T.A. speeds up the learning of reading. This is the clear conclusion of the Warburton Report. I think also that the transition from I.T.A. to the use of the ordinary alphabet is natural and easy, though it happens at a different age for each child.
It is clear now that I.T.A. helps many children to read easily and fluently who otherwise would not be able to do so. About half our children going into junior school are not good readers, and this is a grave defect in our educational system. We still turn out from our schools at the end far too many who are illiterate or semi-illiterate. It is a terrible thing to be illiterate in a literate society.
I am certain that illiteracy is a cause of some kinds of bad behaviour in schools. I have seen how bad behaviour by boys and girls who cannot read when their fellows can has been cured when they have been put on to I.T.A. and have suddenly found the joy of being able to read.
I have the feeling that quite a bit of delinquency and crime may be due to illiteracy in our society, and in this connection I should mention the experience of the Army, which, in a school at Corsham, teaches illiterate soldiers to read by I.T.A. with dramatic success. I have been there and have seen it working.
I.T.A. is particularly of value to non-English speaking people who are learning English. It is the easiest of all languages and has the most difficult spelling of all languages. Experience has shown that I.T.A. is of great value in teaching English to immigrant children, and is a great advantage to the spread of English as a world language.
As the hon. Member for Wavertree said, there is a danger that speakers of English in different parts of the world will be able to communicate with one another in writing and not in speech, as I understand is so in China. He said that an Indian might not be able to communicate with an Australian, but I have seen a Madrassi trying to speak English to a Bengali and neither understanding the other, and I understanding neither of them.
We are good in this country at initiation in education, but I do not think that we are very good in the follow-through. It is absolutely essential that we do not interfere in any way with schools or local education authorities. None the less, we must find some way of following up research and initiation. I am not referring only to I.T.A. This happens in other fields, where there is good research and good initiation and then no great follow-up.
I hope that my right hon. Friend will answer these points, or pass some of these ideas on to the Secretary of State, because he and his Department have a rôle, as does this House, to play in what I might call the national education policy. I hope that my right hon. Friend will draw the attention of teachers to the Warburton Report and will invite them to approach with open minds the clear advantages of I.T.A. as a teaching medium. I hope that it will be possible for the Secretary of State to set his seal of approval on the Warburton Report, but, at the very least, either himself, or through the mouth of my right hon. Friend tonight, tell us what the Department thinks about that report.

11.41 p.m.

The Minister of State, Department of Education and Science (Miss Alice Bacon): The hon. Member for Liverpool, Wavertree (Mr. Tilney) raised the question of the Schools Council's important report on the initial teaching alphabet and he has reminded us of the history of this new method of reading and of the interest and the efforts of some hon. Members. In particular, he has reminded us of Sir James Pitman who, although no longer a Member of this House, has worked so hard on this project. If I may say so, Mr. Speaker, I thought that your entry into the Chamber tonight was beautifully timed.

Mr. Speaker: Order. Mr. Speaker's past is past.

Mr. Gordon Walker: But not forgotten.

Mr. Speaker: I am not interested in any subject whatever.

Miss Bacon: It is perhaps as well, Mr. Speaker, that you did not come in two minutes earlier.
I join with the hon. Member for Wavertree in expressing our sincere condolences to Mrs. Warburton and her family on the death of Professor Warburton, one of the authors of the report which is the subject of tonight's debate. The hon. Member and my right hon. Friend the Member for Leyton (Mr. Gordon Walker) asked what I think of the Schools Council's report and what action is to be taken on it. I believe—and my right hon. Friend the Secretary


of State has expressed the same view in reply to Questions—that the report is a most valuable addition to our knowledge of the processes by which children learn to read. It is a document which calls for serious study, which I hope it will receive, from all who are concerned with the teaching of reading.
It is to be noted that while the report concludes with a statement that the initial teaching alphabet is not the final or the only solution to the problem of teaching children to read, it is mainly favourable to the use of the initial teaching alphabet. It finds that in the majority of schools infants using the alphabet learn to read earlier, more easily and at a faster rate than similar children using traditional orthography.
At the same time, it finds that after about three years of schooling the reading attainments of most children taught initially by traditional orthography are approximately equal to those of children whose initial medium of reading was the initial teaching alphabet. One has to remember—and this was put to me yesterday in some schools I was visiting—that the fact that children are using this alphabet earlier than they would otherwise use the traditional alphabet means that they have a longer period of reading when they are very young.
As to action on the report, the hon. Member provided the answer to this when he said that he did not question the right of head teachers to decide on what alphabet their school should begin. This is a curriculum matter, and I know that the hon. Member appreciates that responsibility for the curriculum rests with the local education authorities and the schools. My Department cannot tell, nor would it wish to tell, local education authorities and teachers what they should teach, or how they should teach.
The report and the initial teaching alphabet have, however, already received a great deal of publicity in the Press and on television and from Questions which have been put down to my right hon. Friend the Secretary of State and other Ministers. They will receive further publicity through this debate. They will be covered in an article in a forthcoming edition of my Department's periodical "Trends in Education", and attention

will be drawn to them in the Schools Council's newsletter "Dialogue", which goes into every school. And the Schools Council will be publishing an abridged and cheaper version of the report next year.
It is to be expected that numbers of local education authorities will organise conferences and discussions about the initial teaching alphabet in teachers' groups and centres, that the alphabet will feature in in-service training for teachers which is provided by authorities, institutes and colleges of education and other bodies, and also through my Department's short courses which, in the case of primary education courses, already generally include consideration of oral and written language. I do not think that there will be any lack of opportunity for teachers to become acquainted with the alphabet and with the exhaustive study that the report provides.
I could not answer tonight the questions put by the hon. Member about the situation revealed by the Inner London Authority literacy survey. So far as immigrant children are concerned, however, I would point out that there are already in progress, under the aegis of the Schools Council, two major projects in teaching these children English. One, based at the University of Leeds, has already produced teaching materials for the 8 to 13 age group and is now working on materials for infants. The other, based at the University of Birmingham, will be introducing trial materials for teaching English to West Indian children into schools next year.
It might be thought strange to be teaching English to West Indian children; but, after what we have heard tonight, it will be recognised why that is so necessary: there are, in fact, many different forms of English. There are questions in this sphere not only of language, but of the children's native culture. It will be for teachers to decide, in the light of this, to what extent the initial teaching alphabet and/or methods based on traditional orthography should be employed.
The hon. Member's reference to discussions with other Departments raises questions of Ministerial responsibility. My right hon. Friend the Secretary of State for Education and Science is not responsible for education in Scotland.


It is for the Ministers responsible for the other Departments named by the hon. Member, and the British Council, all of whom are aware of the report, to take such initiatives as they think fit.
I appreciate the deep interest in, and concern with, the teaching of reading, because this is a basic question. As the report states, a multitude of factors affect children's reading progress, and we have still a lot to learn about them even if we are to learn—again as the report says—that they are difficult, if not impossible, to separate. The report suggests that there should be further research. This is a subject that requires careful consideration in the light of the many claims for priority treatment of research projects in other Welds. In respect of reading ability generally, however, my Department has recently commissioned from the National Foundation for Educational Research a national survey of reading attainment in schools. The survey will be carried out in 1970 and, like the previous surveys carried out periodically since 1948, will cover pupils of 11 and 15 years of age.
The hon. Member may remember that the last survey, carried out in 1964, showed that boys and girls aged 11 reached, on the average, the standard achieved in 1948 by pupils aged 12 years 5 months. There was a corresponding

advance among boys and girls aged 15. We should remember this when we sometimes criticise the reading progress in schools today.
While we must await the results of the 1970 survey before we can say that progress is being maintained, these results do not suggest an overall deficiency in the methods of teaching children to read. At the same time, there are clearly points at which traditional methods do not achieve the results that we would like to see, at which the children's view of the wider horizons is cut off by their inability to read properly and at which they are deprived of the excitement, as the hon. Member puts it, of passing new frontiers. The report of the Schools Council brings into focus one possible way of improving these children's lot.
My right hon. Friend talked of the difficulties of prisoners, and perhaps the effect on juvenile delinquency. I agree that this is a question about which we probably need to know much more, but anything that can help these people and the very young children in our schools is being pursued, and this debate, short as it has been, has served a useful purpose.

Question put and agreed to.

Adjourned accordingly at seven minutes to Twelve o'clock.